Sports bettors in North Carolina could be facing an unexpected tax bill in April.

Now a group of state lawmakers want to change that. House Bill 14, introduced Wednesday in the state house, would allow a state income tax deduction for gambling losses against their winnings.

The current law means that North Carolinians will have to pay taxes on their winnings, regardless if they are up — or down — overall. For example, if a bettor won $10,000 betting on sports over the course of the year, but lost $11,000 in bets, he or she would still owe income tax on the $10,000.

“I do see it as a fairness thing, and I also see it as a clarity issue,” said Rep. Erin Pare, R-Wake, one of the bill’s primary sponsors. “There’s a lot of confusion right now since sports gambling is a new thing in North Carolina, that most people who have been engaging in that over the last year made the assumption that the state laws around this were the same as federal.”

Legal online sports betting launched in North Carolina on March 11, making this the first tax season since legalization.

The federal tax code allows bettors to deduct their loss against their winnings, and Pare said a vast majority of the states with legal sports betting also allow for the deductions.

The state bill would not apply to those who use the standard deduction on their taxes, only those who itemize this deductions. And bettors would not be able to write off more than their winnings under the bill.

The bill would be effective for the 2024 tax year.

Sports bettors wagered more than $5.3 billion in 2024. They won more than $4.7 billion. The state income tax rate was 4.5% in 2024, meaning taxpayers could owe as much as $211.5 million in state taxes.

The state budget is more than $33 billion.

“Not being able to deduct losses means that you must pay taxes on your gross winnings, even if you lose money,” wrote Nathan Goldman, an accounting professor at North Carolina State University, on social media. “This issue violates most common principles of a good tax system since it creates a situation where a taxpayer will owe taxes without the wherewithal to pay taxes.”

Goldman was among the first to note and write about the potential tax consequences for North Carolina sports bettors.

Former Gov. Roy Cooper, who supported legalization, called for a change to the law last year.

Pare said some gamblers in her district brought the issue to her attention. She announced her intentions to file the bill in November.

“This is just the right thing to do for the people,” she said Wednesday.

But the legislation still faces opposition. Pare said some lawmakers who are against gambling are against the bill.

House Speaker Destin Hall, R-Caldwell, said Wednesday that he would have to examine the tax and revenue implications of such a change.

“What I have seen on sports betting is that the numbers have been very high on revenue, and so we’re looking at it from that standpoint, but I need to take a look at what fiscal impacts are on being able to deduct those taxes,” Hall said. “I understand a lot of states do that, and, as a general matter, I think fewer taxes will be good for the citizens of the state.”

Senate leader Phil Berger, R-Rockingham, dismissed the idea of changing the tax code in November.

“Never been the policy in North Carolina to allow, at the state level, deduction of or the balancing of losses versus gains,” he said. “I just don’t see where we need to change that policy.”

Republicans Reps. Steve Tyson, Keith Kidwell and Matthew Winslow were also primary sponsors of the bill.