North Carolina will have millions of new tax dollars if the state legalizes sports betting. A new bill to make that happen is making its way through the state’s House of Representatives.
North Carolina sports betting already exists, but it isn’t a full-fledged industry. Online betting is the missing piece of the puzzle.
Online sports betting would provide the state fresh tax income, but what do lawmakers plan to spend that money on?
North Carolina sports betting taxes
Lawmakers filed North Carolina’s new sports betting bill early last week.
That bill is hoping to set the tax rate for the state’s online sportsbooks at 14%. That’s a touch higher than 2022’s bill, which was originally aiming for an 8% rate.
A 14% rate is slightly lower than the markets in neighboring states. Virginia uses a 15% rate, while Tennessee is higher at 20%.
North Carolina’s final tax rate is still up in the air. It wouldn’t be a surprise to see lawmakers bump that 14% rate higher as the bill makes its way through the statehouse.
The sports betting business is a lucrative one, so that could translate to tens of millions of dollars worth of annual taxes for the Tar Heel State. It’s one of the key benefits of sports betting that lawmakers are considering.
North Carolina’s plans for sports betting tax spending
The current version of North Carolina’s sports betting bill calls for the potential tax revenue to be directed to several new areas.
There are a handful of organizations that would receive a flat fee every year to benefit from the industry. That spending includes:
- $2 million to the Department of Health and Human Services to fight problem gambling;
- Up to $500,000 in State Lottery Commission funding for regulating the industry;
- $1 million to the Division of Parks and Recreation to support youth sports;
- $2.1 million divided between seven different universities to support collegiate athletics;
- $1 million for the Outdoor Heritage program to support various matters.
The seven universities receiving a piece of that $2.1 million are all Historically Black Colleges and Universities (HBCUs). Outside of the flat-rate payments listed above, these HBCUs will also receive 10% of the remaining annual sports betting taxes.
The rest of North Carolina’s tax spending is pretty straightforward.
Subtract the flat-rate payments and the HBCU percentage, and the remaining 90% of North Carolina’s sports betting taxes will be split between the General Fund (60%) and a new Major Events, Games and Attractions Fund (30%).
The goal of the new attractions fund is to create jobs by bringing new entertainment events to North Carolina.
Of course, all of this could change as lawmakers debate the bill in the coming weeks. We’ll know soon enough, as the bill’s first hearing is scheduled for March 21.