Legal betting nationwide for Sunday’s 59th Super Bowl between the Eagles and Chiefs is expected to generate a record-setting $1.5 billion or more, marking North Carolina’s first time allowing legal wagers. Rep. Erin Paré proposes a bill to align North Carolina sports gambling with federal law, resulting in a deduction on taxes.
Rep. Erin Paré, R-Wake, is advocating for the state to align its tax policies with federal law by proposing a bill allowing sports gambling losses to be deducted on taxes, a provision already permitted at the federal level and in most states.
“This bill conforms North Carolina law to federal law and seeks to prevent confusion and surprise tax bills,” Paré stated. “The vast majority of states that have legal sports betting allow this deduction capped at winnings.”
House Bill 14, also known as the Gambling Losses Tax Deduction, would be retroactive to Jan. 1, 2024, if signed into law. Given previous bipartisan support for similar measures, the legislation has a strong likelihood of passing.
North Carolina, like most Southern states except Florida, Tennessee, and Texas, has a state income tax. To deduct gambling losses, a filer would need to itemize deductions and exceed the standard deduction thresholds. For single filers, the standard deduction is $12,750, while married couples filing jointly have a standard deduction of $25,500.
Under the current tax structure, two taxpayers winning $100,000 in sports gambling would be treated the same for tax purposes, regardless of whether one incurred equal losses and the other had none.
North Carolina became the 38th state to legalize sports wagering, and promotional incentives from sportsbooks have flooded the market since its debut on March 11, 2023. Since then, over $5 billion has been wagered, generating more than $105 million in state revenue.
Gross wagering revenue—defined as the amount received by sports wagering operators from bets, minus payouts—has been taxed at 18%, resulting in an average daily gain of $354,919 for the state through the first 296 days of legal betting.
