North Carolina’s new tax rate begins as revenue climbs

• North Carolina sportsbooks generated $63.2 million in gross wagering revenue during July, up 16.8% from June.
• July was the first month under the state’s higher 23% sports betting tax rate, raised from 18%.
• Estimated tax proceeds reached $14 million for the month, according to the North Carolina State Lottery Commission.

North Carolina’s licensed sportsbooks generated $63.2 million in gross wagering revenue during July, the North Carolina State Lottery Commission reported, up 16.8% from June’s $54.1 million.

The increase came in the first month that North Carolina’s new 23% sports betting tax rate applied to a full month of activity, following Governor Josh Stein’s July 7 signing of the state budget.

Hold rate climbs

Bettors in North Carolina wagered $566.3 million on sporting events between July 1 and July 31, a slight dip from June’s $589.6 million handle. Despite the smaller handle, sportsbooks kept a larger share of the money wagered.

The state’s hold rate, the percentage of wagers operators retain as revenue after paying out winnings, rose to 11.2% in July from 9.2% in June. That two-point swing is what pushed gross wagering revenue higher even as total wagering slipped slightly month over month.

Account holders won $498.7 million during July, down from $530.3 million in June. Gross wagering revenue, the figure North Carolina taxes, is calculated as total wagers minus winnings paid out, before any deductions for operating expenses.

New tax rate kicks in

July marked the first full month under North Carolina’s higher sports betting tax. Section 44.7(a) of the state’s 2026 Appropriations Act (Senate Bill 257) raised the sports wagering tax from 18% to 23% of gross wagering revenue, effective immediately upon the July 1 start of the new fiscal year. Josh Stein signed the budget into law on July 7, closing out months of negotiation over the rate.

Under the new rate, estimated tax proceeds for July reached $14 million, up from an estimated $9.7 million in June. That jump reflects both the stronger revenue total and the five-percentage-point rise in the rate itself.

The same legislation left the 6% tax it introduces on prediction market platforms for a later start, with that levy not taking effect until January 1, 2027. It also reshaped how sports-wagering tax proceeds are distributed, capping the Major Events, Games and Attractions Fund at $30 million a year and adding North Carolina State University and the University of North Carolina at Chapel Hill as recipients of sports-wagering tax revenue for the first time, as previously reported.

Seasonal patterns hold

July has historically been one of the slower months for North Carolina sports betting, trailing the volumes generated by football season, October and November, and March Madness. Even so, mid-summer wagering held up better than in prior years, with continuing FIFA World Cup knockout matches among the events drawing bettor interest across multiple US markets during the month.

By comparison, March 2026, the market’s strongest month to date, produced a $726.2 million handle and a 10.45% hold rate, nearly double the revenue of the same month a year earlier. July’s figures sit well below that peak, consistent with the market’s usual summer lull, but the elevated hold rate suggests operators are still finding ways to keep more of what they take in during a lower-volume month.

North Carolina’s sportsbook market has expanded steadily since its March 2024 launch, and the state has cleared $500 million in monthly wagers for a run of consecutive months, including a handle record set in November. That momentum will be tested once the new tax rate meets the football calendar that typically drives the state’s biggest numbers.

Operators now have a full quarter of data ahead of them before the market’s traditional autumn peak, giving the first real signal of how promotional budgets and product mix respond once the 23% rate applies to the state’s highest-volume months.