With gambling tax increase, NC Republicans are taking a gamble of their own | Opinion
North Carolina Republicans have insisted that the state’s alarming future revenue forecasts must be wrong. They’ve brushed off concerns about declining revenues and forged ahead with tax cuts that even some anti-tax experts have warned might go too far.
Now they seem to be implicitly acknowledging that maybe the state could use some more tax revenue after all. WRAL reported this week that budget negotiators have agreed to raise the tax rate paid by sports betting operators from 18% to 23%, “as a way to pay for other budget priorities.”
There is, of course, nothing wrong with raising taxes on gambling. The increase still keeps North Carolina in line with other states, and it’s for a good cause. Revenue from sports betting doesn’t just go into the general fund; it’s also distributed to athletic departments at UNC System schools, youth sports programs and gambling addiction education and treatment.
But perhaps lawmakers have come around to the fact that slashing income taxes with no real backup plan is a bad idea.
Much like the weather, revenue forecasts can sometimes be wrong. They can be better than expected, like they were this year. Last month, Republican lawmakers learned during budget negotiations that revenue for the current fiscal year would be about $370 million more than expected. State economists said that strong stock market performance and rising corporate profits caused income tax collections to be higher than expected.
That’s good news for this year, but it’s not something we can rely on in the future. The stock market can be volatile, and forecasts can also be worse than expected, which isn’t exactly reassuring when future forecasts are already raising red flags. Unfortunately, things do cost money, and the government needs taxes to pay for them. Education. Roads. Health care. Some of those areas are already in dire need of investment, and the need will only grow as North Carolina’s population continues to boom.
Increasing taxes on gambling may make up for some of the revenue lost through income tax cuts, but it’s unlikely that it will be enough. Though GOP lawmakers have agreed to proceed with more gradual tax cuts, state economists predict that it will reduce revenues by nearly $1 billion just in the next fiscal year. Cumulative revenue losses over the next eight years would total more than $37 billion, their projections show, which is more than the entire budget for the current fiscal year. In the two years since North Carolina legalized online sports betting, the state has collected more than $287 million in taxes. That’s no paltry sum, but it obviously isn’t enough to make up for the revenue lost through income tax cuts.
It gets to a concept that Republicans don’t always like to acknowledge: you can reduce personal and corporate income taxes, but at some point, the money’s got to come from somewhere. In Nevada, for example, there is no personal or corporate income tax. But the state does have a significantly higher sales tax rate, and it relies heavily on gaming and entertainment taxes for revenue. Obviously, North Carolina doesn’t have a Las Vegas to help drive revenue. Texas also doesn’t have a personal income tax, but it has higher sales taxes and some of the highest property taxes in the nation. Florida has no personal income tax, but it does have a corporate income tax, as well as higher sales taxes and a booming tourism industry.
In North Carolina, lawmakers seem determined to make it work by crossing their fingers and cutting spending, with the hope that it’ll all work out in the end. They want to completely eliminate the corporate income tax, limit property taxes and keep the sales tax at its current rate. That sounds great, but it’s not sustainable. A gambling tax increase is a step toward diversifying the state’s tax portfolio, but without changes in other areas, lawmakers are making a gamble of their own.
Deputy Opinion Editor Paige Masten is covering politics and the 2026 elections for The Charlotte Observer and The News & Observer.
This story was originally published June 14, 2026 at 5:00 AM with the headline "With gambling tax increase, NC Republicans are taking a gamble of their own | Opinion."
