North Carolina Universities Set for Sports Betting Tax Windfall
North Carolina universities are in line for a cut of taxes from legal sports betting in the state, reports suggest.
Under current North Carolina betting law, schools receive a share of levies generated by sportsbook operations. So far, however, UNC and NC State have been left out of the loop. Until now.
The schools could receive nearly $6 million starting July 1, 2027, according to a WRAL report. This would come mainly from a proposed tax hike on sports betting revenue.
At a Glance:
- NC State and University of North Carolina could receive tax windfall
- 13 UNC System schools already receive contributions
- Sports betting was legalized in North Carolina in 2023
- NC voted to increase sports betting tax to 23% last week
NC Universities benefit after years out of the loop
North Carolina has had legalized online sportsbooks since 2024. While local schools have benefited, some of the cuts in betting taxes have not trickled down to larger universities. That has been remedied following a change by lawmakers.
Schools in line for a payday include:
- University of North Carolina
- NC State University
- Appalachian State, Charlotte and East Carolina (ECU)
Two universities, NC State and UNC, would receive a chunk of the earmarked $5.8 million. Several Football Bowl Subdivision (FBS) programs in North Carolina will also receive money.
Under new distribution rules in North Carolina, NCAA Division 1 schools will get up to $400,000 apiece. From July 1 next year, Football Bowl Subdivision schools stand to earn up to $2.5 million each.
North Carolina gambling tax rise fiercely opposed
This month, North Carolina hikes its gambling tax to 23% from 18%. This puts the state between Illinois and Massachusetts in the amount it charges sports betting operators.
However, not all sports betting companies are happy.
FanDuel reported over $6.8 billion in revenue for the year ending May 2026. Some of the $133 million it owes in taxes will go toward athletics programs and schools across North Carolina.
However, in a letter sent to customers in June, FanDuel said, "Legal sports betting is generating real revenue for collegiate athletic departments across the state.
“A tax hike would threaten that funding and hit fans like me directly.”
Prediction markets targeted with new tax
Alongside a rise in sports betting tax, prediction markets are also in the firing line for further increases. NC intends to levy a 6% fee on operators’ net fee revenues.
Currently, prediction markets are federally regulated and don’t pay state taxes. However, many U.S. states want that to change, arguing that prediction markets like Kalshi should be classed as betting and therefore taxable.
In southern states, Kentucky is hitting prediction markets hard, classifying them as “illegal betting” and pursuing the companies in court.
With prediction sites like Kalshi fighting back with lawsuits of their own, it remains to be seen whether North Carolina’s 6% tax will fly.
