The state of North Carolina was quick to capitalize on the financial gains of legalized sports betting. A recent report presented to the North Carolina State Lottery Commission revealed that the state expected to receive $131.3 million in taxes from sports betting activities in the first year of operations until March 10. This figure exceeded initial estimates made by legislative researchers, who had predicted annual tax revenues of around $100 million within five years. The taxation calculation was based on an 18% tax rate on gross wagering revenue, which is the betting revenue minus the payouts.
Starting on March 11, 2024, licensed operators in North Carolina were allowed to accept bets through smartphones and computers as per the 2023 state law that regulated this form of gambling. With this, North Carolina became the 30th state, along with the District of Columbia, to offer mobile sports betting.
The significant tax revenue boost was linked to the substantial amount of betting activity in North Carolina. In the first year of operations, over $6.8 billion in bets were placed, resulting in $729.3 million in gross wagering revenue for the eight licensees, according to the commission's report. The state lottery's chief business development officer expressed satisfaction with the successful year, while a commissioner also shared optimism about the outcomes.
North Carolina, with its population of 11 million, had been an appealing market for companies offering interactive wagering services. Before the enactment of the law, sports betting was only permitted at three casinos operated by two American Indian tribes within the state. The law allowed registered customers within North Carolina to bet on various sports and also paved the way for potential in-person wagering at sportsbooks besides those at the tribal casinos.
A substantial portion of the sports wagering revenue, nearly $500 million, was classified as "promotional wagers," which were incentives for new customers provided by companies after the initial bet. Excluding these amounts, the months with the highest betting volume were November, December, and January, coinciding with college and professional football playoffs, as well as college basketball and hockey events.
The tax revenues collected from sports betting activities are allocated to athletic departments in most University of North Carolina system schools, programs for amateur sports, and initiatives for gambling addiction education and treatment.