State legislators split on tax hike
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Raleigh – While state officials debate various topics in the process of approving the next fiscal year’s budget, one topic stands out to sports fans – gambling.
The June 30 deadline is quickly approaching with the next fiscal year beginning Tuesday. The N.C. House and Senate are struggling to come to agreements on the 2025-26 budget.
The state Senate’s budget proposal released in April included a tax hike on sports betting operators. They want to increase the tax from 18% to 36%.
Meanwhile, the House released their budget proposal in May. They kept the 18% tax on mobile sports betting.
Also in the proposals, the University of North Carolina-Chapel Hill and N.C. State would be included. In the first year of legal mobile sports betting, they were excluded due to their large size and already large revenue from sports such as football and basketball.
In the 2024-25 fiscal year, included schools got $1.2 million each. With the new budget proposals, the amount the schools receive will vary.
It’s estimated that the bigger schools, like UNC-Chapel Hill and N.C. State, will receive $28 million in the Senate budget and $13.2 million in the House budget.
Appalachian State and East Carolina would earn the second most, with $13.2 million in the House budget and $5.8 in the Senate budget.
Schools earning the lowest amount would be Elizabeth City State, Fayetteville State, UNC-Pembroke and Winston-Salem State. They would receive $4.8 million in the Senate budget and $3 million in the House budget.
The school closest to Cherokee County, Western Carolina University, would receive $5.3 million in the Senate budget and $3.7 million in the House budget.
The state tax policy is one of the hot topics among officials as the deadline quickly approaches. Tax policy has been a major focus, as it directly affects the state’s revenue and growth.
With an increased tax rate, more money could be distributed to universities to help fund their athletic departments. For example, within the first year of legal mobile sports betting, Appalachian State used some of the sports betting money to help fund a new practice facility.
UNC Asheville has used the funds to help with various costs, as it has the highest student fee of UNC System schools at $906 per student per year. With the funds from sports betting, they hope to not have to raise the fee anymore.
Other schools have used the newly available funds to help offset expenses like travel and facilities. Some schools are also using the funds to help with scholarships to help attract athletes to play sports at the universities.
Schools will also use funds to help with student health, both mental and physical. N.C. A&T State University – one of the state’s 10 historically black colleges and universities, and the largest one in the country – plans to use funds to help add trainers and other health-related personnel to the athletics staff.
Winston-Salem State, a Division-II black college, will make facility upgrades with the funds received from legal mobile sports betting.
Daily talks have continued, but the two sides have struggled to find common ground. The final ruling comes down to Gov. Josh Stein once the final proposal hits his desk.
First year in review
Mobile sports betting in North Carolina was a hit from the second it went live on March 11, 2024. Account holders in the state have bet more $6.6 billion in paid and promotional bets. From those bets, players have won more $5.85 billion.
Since the launch of legal mobile sports betting in the state, the gross wagering revenue totals more than $713 million. After the 18% tax, the sated received more than $128 million in proceeds.
The highest-grossing month of mobile sports betting was April 2024, which was the first full month it was legal. In April 2024, the gross wagering revenue totaled $105,251,672.
The lowest betting month was Aug. 2024 earning $33,751,015. Along with August 2024, December 2024 was the only other month in the first year of legal mobile sports betting to make less than $40 million.
The state distributed the funds received to various universities and groups across the state.
A total of $2 million goes to the state Department of Heath & Human Services for gambling addiction education and treatment programs. A total of $1 million goes to N.C. Amateur Sports to expand opportunities for youth across the state.
A total of $1 million goes to the N.C. Youth Outdoor Engagement Commission for grants up to $5,000 per team or group, per county, to help cover travel costs to in-state or out-of-state sporting events. It also helps cover grants up to $25,000 to attract amateur state, regional, area and national sporting events.
The tax proceeds also went to the N.C. State Lottery Commission and N.C. Department of Revenue for certain reimbursements related to implementing and administering the new law in its first year.
Of the remaining funds, 20% was distributed evenly among the 13 state universities to support collegiate athletic departments. This 20% went to the $1.2 million that the universities received in the first year of legal mobile sports betting.
A total of 30% of remaining funds generated from mobile sports betting went to the new N.C. Major Events, Games & Attractions Fund to foster job creation and investment in the state. A total of 50% goes to the state’s general fund.