North Carolina Governor Enacts Budget with Revised Sports Betting and Prediction Market Taxes
Gov. Josh Stein signed North Carolina's $34 billion budget into law on July 7, 2026 and the measure raises the tax rate applied to online sportsbooks from 18 percent to 23 percent of gross wagering revenue while adding an entirely new levy on prediction market platforms.
The legislation also places a 6 percent tax on net trading fee revenue collected by qualifying prediction market operators and those operators will operate without needing a separate state license because their activities fall under existing federal oversight by the Commodity Futures Trading Commission.
Key Provisions in the Enacted Budget
State lawmakers approved the overall spending plan earlier in the 2026 session and the governor's signature on July 7 finalized the tax adjustments that directly affect the regulated gambling sector. The increased rate on sportsbooks applies to all licensed online operators that accept wagers from North Carolina residents and the new prediction market provisions create the first explicit state-level authorization and taxation framework for such platforms anywhere in the country.
Officials note that prediction market operators meeting federal CFTC requirements can now collect trading fees from North Carolina users while remitting the 6 percent tax directly to the state treasury and this structure avoids duplicative licensing because CFTC registration already governs their market activities.
Tax Adjustment for Online Sportsbooks
The move from 18 percent to 23 percent on gross wagering revenue represents a five-percentage-point increase that will generate additional state funds beginning in the current fiscal year. Licensed operators must recalculate their remittance schedules immediately and the higher rate covers all forms of online sports wagering including single-game bets and same-game parlays that have grown popular in recent seasons.
Revenue from the sports betting tax continues to flow into the state's general fund where lawmakers allocate portions toward education and public safety programs as outlined in teh broader budget document.
New Framework for Prediction Market Operators
North Carolina becomes the first state to codify a tax on net trading fee revenue for CFTC-regulated prediction markets and the 6 percent rate applies only after operators deduct direct costs associated with market settlement and compliance. Operators must maintain clear records separating trading fees from other revenue streams so that state auditors can verify the correct tax calculation each quarter.
Because these platforms already hold CFTC registration they avoid the additional layer of a state-specific sports wagering license yet they remain subject to standard consumer protection rules that apply to all financial products offered to North Carolina residents.
Federal Oversight and State Implementation
The Commodity Futures Trading Commission maintains primary regulatory authority over event contracts and prediction markets that qualify as swaps or futures and North Carolina's new tax law explicitly defers to that federal structure. State revenue officials will coordinate with CFTC staff to confirm which operators meet the qualifying criteria before the 6 percent tax takes effect.
Early guidance from the Department of Revenue indicates that operators should begin collecting and remitting the new tax with their first quarterly filing after the July 7 signing date and the department plans to issue detailed forms within the next 30 days.
Revenue Allocation and Reporting Requirements
The budget directs the additional collections from both the sports betting rate increase and the new prediction market tax toward existing state programs without creating new dedicated funds. Operators must submit annual compliance reports that detail total gross wagering revenue and net trading fees so that the legislature can evaluate the performance of these tax measures in future sessions.
Those reports will also include data on the number of active North Carolina accounts and the total volume of wagers placed which allows analysts to track market growth under the revised tax rates.
Conclusion
The July 7, 2026 signing completes the legislative process that began months earlier and places North Carolina at the forefront of states that have integrated prediction markets into their regulated gambling landscape under federal CFTC oversight. The dual tax changes on sportsbooks and prediction platforms now stand as the operative law and operators have begun adjusting their systems to meet the new remittance obligations.