Financial Impact of Mobile Sportsbook Tax in North Carolina

• Governor Roy Cooper will sign the legal sports betting bill HB 347 into law on Wednesday, as indicated by his public schedule.
• The fifth edition of House Bill 347 fiscal note emphasizes the impact of the tax increase from 14% to 18% and changes the terminology from “Privilege Tax” to “Sports Betting Tax”
• With the tax changes, the net state impact for the 2024-2025 fiscal year improves from $21.2 million to $53 million.

CHARLOTTE, N.C. – Notable tax amendments to North Carolina’s legal sports betting bill HB 347 will have massive revenue implications. The tax increase appears minimal, moving from 14% to 18% in the Senate Commerce and Insurance Committee, but the increase and accompanying changes are expected to create more than double the net state impact by 2027.

According to the updated legislative fiscal note for the legal sports betting bill, gross wagering revenue received by one of their 12 potential licensed operators will see a tax at an 18% rate. The initial sports wagering license will cost $1 million dollars, plus $50,000 for the service provider license and $30,000 for a sports wagering supplier license.

The biggest impact on the expected revenue increase from version two to version five of the bill is the change in taxation methods. The second edition of NC HB 347’s legislative note uses “privilege tax”, while the fifth edition uses “sports wagering tax”.

As a result, the expected legal sports betting tax revenue in fiscal year 2024-2025 increases from $22.2 million in version two to $64.6 million in version five.

Legislative Fiscal Notes Illustrate Impact

House Bill 347 (Second Edition)

Fiscal Year:	Estimated Privilege Tax Revenue ($ In Millions):
2023-2024	$2.9
2024-2025	$22.2
2025-2026	$32.0
2026-2027	$47.6
$2027-2028	$61.6

Looking purely at tax revenue, the 14% rate and “Privilege Tax” of the initial bill doesn’t begin to compare to the numbers from the 18% tax rate and “Sports Betting Tax” that exists in the updated version.

House Bill 347 (Fifth Edition)

Fiscal Year:	Estimated Privilege Tax Revenue ($ In Millions):
2023-2024	$0
2024-2025	$64.6
2025-2026	$83.5
2026-2027	$96.3
$2027-2028	$100.6

$2 million dollars of the massive tax revenue will be distributed to the Department of Health and Human Services for programs to support and educate problem gamblers. $1 million dollars each will be distributed to North Carolina Amateur Sports and the North Carolina Outdoor Heritage Advisory Council to fund youth sports.

13 different University of North Carolina constituents will receive $300,000 dollars annually, with the remainder of the revenue distributed as such.

• 20% to be distributed equally among the 13 UNC institutions’ collegiate athletic departments
• 30% to the North Carolina Major Events, Games, and Attractions Fund
• 50% to the North Carolina General Fund

North Carolina’s ninth-highest population in the United States makes them a contender to rank amongst the top for sportsbook revenue by state, which proves well for the state and their tax revenue recipients.

North Carolina Governor Roy Cooper will sign House Bill 347 into law on Wednesday, meaning legal sports betting will launch sometime before June 15, 2024. The bill states that legal North Carolina sports betting must launch no later than 12 months after Cooper signs the bill.

News tags: NC HB 347 | North Carolina | Roy Cooper