North Carolina Gov. Cooper Supports Changes to Sports Betting Taxation

Early in March, North Carolina became the latest state to launch its legal sports betting market. Joining a growing list of more than three dozen US states, The Tar Heel State rolled out mobile sports betting, providing sports fans and bettors alike a plethora of options for wagering on their favorite sports.

As with any other state, North Carolina residents are subject to paying taxes on their gambling winnings and this includes sports wagers. However, unlike other states, due to the current tax regulations, Tar Heel State residents may also be subject to paying taxes even on their sports betting losses.

This unexpected tax burden was discussed by Poole College’s Nathan Goldman and Christina Lewellen, who submitted a recent opt-ed piece on the matter last week. The duo acknowledged that while gamblers know to expect paying taxes on their winnings, paying even if on a net loss is something unexpected.

The explanation of the experts was simple. They pointed to an example where a person has won $9,000 per year, which means that his tax income will increase by $9,000. However, if the same person has $9,000 in gambling losses and that money is not deducted from his tax income, they will still have to pay the income tax for the $9,000 in winnings. In other words, even though a gambler may be at a net loss, or they have not made any money, they would still owe $405 tax on their gambling winnings. This is the case unless gambling losses are deducted.

Legislative Changes Are Needed to Address the Issue

Goldman, who was recently interviewed by CBS17, revealed that North Carolina lawmakers can make changes to the gambling tax regulations and eliminate the issue. “The state actually has the power to address this immediately,” he explained. Additionally, Goldman pointed out: “Most notably, what would really help, is it would eliminate these tax surprises. And, it would really help connect the North Carolina tax system with what many people perceive to be a just tax system.”

“When it comes to sports wagering, it’s not fair to have to pay taxes on your winnings without being able to deduct your losses. Legislators should fix this.“

Gov. Roy Cooper

North Carolina Gov. Roy Cooper also joined the debate about the potential unexpected tax burden for bettors in the state. In a post on X, formerly Twitter, he explained that it is not fair for gamblers in the state to pay taxes on winnings without the possibility of deducting losses. Finally, Gov. Cooper encouraged legislators in the state to address and resolve this issue.