North Carolina Approves Sports Betting Tax Increase
HighlightsÂ
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North Carolina Gov. Josh Stein approves a tax on prediction markets and hikes the sports betting tax.
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Governors in Illinois, Arizona, and Michigan have proposed higher sports betting or casino tax rates as part of their budget proposals this year.
Gov. Josh Stein (D) signed a $34 billion fiscal year 2026 budget bill on Tuesday that includes a new prediction market tax and increases the levy on online sports betting. The measure could pave the way for another legal dispute over the limits of state authority to regulate federally overseen prediction market software solutions.
The budget introduces a 6% tax on prediction market operators’ net trading revenue and increases the sports betting tax from 18% to 23%. The new law will take effect on 1 January 2027.
Unlike Kentucky and Illinois, the legislation does not establish a state licensing or regulatory framework for prediction markets, even though those states paired their tax measures with additional regulatory requirements.
The prediction market could pose a legal battle in North Carolina,
The CFTC has initiated legal proceedings against Kentucky and Illinois, claiming their prediction market tax laws improperly attempt to regulate federally regulated derivatives markets. In a separate action, Kalshi has contested Illinois’ tax framework in federal court.
On the other side, multiple states have moved to restrict or prohibit sports-event contracts. North Carolina has accepted federally regulated prediction markets as legal and is seeking to raise tax revenue from them.
This year, the governors of Illinois, Arizona, and Michigan proposed increasing taxes on sports betting or casino operations in their budget plans.
For more information, Refer Here!
The budget introduces a 6% tax on prediction market operators’ net trading revenue and increases the sports betting tax from 18% to 23%. The new law will take effect on 1 January 2027.
Unlike Kentucky and Illinois, the legislation does not establish a state licensing or regulatory framework for prediction markets, even though those states paired their tax measures with additional regulatory requirements.
The prediction market could pose a legal battle in North Carolina,
The CFTC has initiated legal proceedings against Kentucky and Illinois, claiming their prediction market tax laws improperly attempt to regulate federally regulated derivatives markets. In a separate action, Kalshi has contested Illinois’ tax framework in federal court.
On the other side, multiple states have moved to restrict or prohibit sports-event contracts. North Carolina has accepted federally regulated prediction markets as legal and is seeking to raise tax revenue from them.
This year, the governors of Illinois, Arizona, and Michigan proposed increasing taxes on sports betting or casino operations in their budget plans.
For more information, Refer Here!
