North Carolina Implements Prediction Market & Sports Betting Tax Hikes

North Carolina’s Governor signed the Current Operations Appropriations Act of 2026, establishing a new tax on prediction markets and increasing the sports wagering tax rate. This legislation also adjusts individual income tax rates and addresses gambling loss deductions.

What Happened

The North Carolina Governor officially signed the Current Operations Appropriations Act of 2026 into law, according to Bloomberg Tax News. This legislative act introduces a new tax framework for various sectors within the state. Specifically, it establishes a tax on prediction markets and modifies the existing tax structure for sports wagering.

The new law includes several key provisions beyond gaming. It addresses individual income tax rates, implementing scheduled reductions over the coming years. Additionally, it provides specific stipulations regarding itemized deductions for gambling losses, a measure that impacts individual taxpayers in the state.

Key Details

• A tax on prediction markets has been introduced, set at 6 percent of net trading fee revenue, as reported by Bloomberg Tax News.
• The sports wagering tax rate for operators has been increased to 23 percent, according to Bloomberg Tax News.
• The legislation allows for an individual income tax itemized deduction for gambling losses, Bloomberg Tax News stated.
• Individual income tax rates are slated for reduction, reaching 3.49 percent in 2027, 2028, and 2029, then decreasing to 3.24 percent in 2030, 2031, and 2032, and further to 2.99 percent after 2032, as detailed by Bloomberg Tax News.
• Conditional individual income tax rate reductions previously set for between 2027 and 2034 are repealed under this new law, according to Bloomberg Tax News.

Why It Matters

The implementation of a 6 percent tax on net trading fee revenue from prediction markets establishes a new revenue stream for North Carolina, impacting operators in this emerging sector. The increase of the sports wagering tax rate to 23 percent for operators represents a significant adjustment to the operational landscape for sports betting companies within the state. This change could influence financial planning and operational strategies for licensed sports wagering entities.

Furthermore, the provision for an individual income tax itemized deduction for gambling losses provides a fiscal consideration for residents engaged in gambling activities. The broader adjustments to individual income tax rates, including scheduled reductions and the repeal of conditional tax cuts, represent a comprehensive overhaul of the state’s tax policy, affecting both businesses and individual taxpayers over the long term.

What’s Next

Individual income tax rates are slated to decrease to 3.49 percent in 2027, 2028, and 2029. Further reductions are planned for 2030, 2031, and 2032, reaching 3.24 percent, before settling at 2.99 percent after 2032, as reported by Bloomberg Tax News. The repeal of conditional individual income tax rate reductions between 2027 and 2034 will also take effect.

Originally reported by Bloomberg Tax News·Published 8 Jul 2026, 20:58