North Carolina's two largest universities, the University of North Carolina (UNC Chapel Hill) and North Carolina State University (NC State), may soon be able to collect tax revenue from sports betting, according to a recent report by WRAL News. A new budget proposal is expected to make these institutions eligible for a share of tax revenue earned from sports betting activities.
Currently, under North Carolina's tax regulations, $300,000 in annual payments from sports betting revenue is distributed among the 13 universities in the UNC system. These institutions are also entitled to 20% of the remaining sports betting tax revenue, which is allocated after state needs, with additional revenue funnelled to youth sports programs, gambling addiction treatment services, and the general fund.
The proposed budget would reform this tax structure, allowing both UNC Chapel Hill and NC State to benefit from sports betting proceeds, as they are currently not included in the UNC system. The other universities in the system are: Appalachian State, East Carolina, Elizabeth City State University, Fayetteville State, North Carolina A&T State, North Carolina Central, UNC Asheville, UNC Charlotte, UNC Greensboro, UNC Pembroke, UNC Wilmington, Western Carolina, and Winston-Salem State.
In addition to broadening eligibility, the new budget reportedly increases the annual payments to each school to around $400,000, which could provide significant financial support for NC State and UNC Chapel Hill as they compete at the Power Four level in athletics. This funding could also help ease infrastructure costs as the schools adapt to the evolving landscape of Name, Image, and Likeness (NIL) deals.
With enrollment figures of approximately 37,300 students at NC State and about 32,200 at UNC Chapel Hill, these universities are the largest in the state. Appalachian State, UNC Charlotte, and East Carolina could also see increased tax payouts since they have NCAA FBS football teams.
The WRAL report did not specify the individuals leading the initiative to include UNC Chapel Hill and NC State in the proposal. Attempts to contact Senate leader Phil Berger, who has been vocal about the state's gaming industry and gambling issues, were made.
Tax revenue from sports betting at these universities typically funds various operational costs and infrastructure improvements, such as renovating sports facilities. An example is Appalachian State's planned 85,000-square-foot indoor practice facility, with $3.3 million sourced from sports wagering tax revenue, part of a $29 million total projected cost, set to be completed by September 2026.
Proposed adjustments to tax regulations aren't limited to universities. The new budget also aims to establish a general tax rate for sports betting set at 23%, an increase from the current 18%. While included in the Senate's budget proposal, this initiative has faced opposition. The Sports Betting Alliance (SBA) condemned this increased tax rate, asserting that it would harm legitimate, regulated businesses that have contributed substantial tax revenue to the state and university athletic departments. The SBA urged state legislators to prioritize strengthening regulations to protect consumers and maintain job security.
Last year, a Senate proposal to double North Carolina's tax rate to 36% was passed by the Senate but ultimately failed in the House.
The budget proposal also addresses forecasted tax for prediction markets operational in North Carolina. A new 6% tax on net trading fee revenue from these markets is set to commence on January 1, 2027, impacting North Carolina sportsbooks involved in the prediction market sector, including DraftKings, FanDuel, and Fanatics.
In Louisiana, tax revenue is similarly allocated to support college athletics. Last June, Governor Jeff Landry signed a bill raising the state's online sports betting tax rate from 15% to 21.5%, directing part of this revenue towards the Supporting Programs, Opportunities, Resources, and Teams Fund (SPORT Fund), which supports student-athletes. Approximately 25% of Louisiana's tax revenue is distributed among 11 college athletic departments, providing essential funding for scholarships, facility upgrades, and medical coverage.
