The Super Bowl, America’s biggest gambling event, is coming up. This year, North Carolinians have some new betting options—and some important tax considerations to keep in mind.

Super Bowl LIX will be the first since North Carolina legalized online sports wagering in March 2024. That’s not the only new betting avenue that’s opened to N.C. residents recently; in December 2024, the Casars Virginia casino opened in Danville, Va., less than 3 miles from the North Carolina state line.

Whether on their phone or in a casino, N.C. gamblers need to be mindful of their tax liability. Gambling winnings are taxable income, and current state law effectively taxes losses, as well. Winnings are subject to federal taxes (at anywhere from a 10- to 37-percent rate) and state taxes (at the 4.25-percent personal income tax rate in North Carolina).

Poole accounting professors Nathan Goldman and Christina Lewellen recently discussed the tax effects of gambling online, in person and across state lines:

For tax purposes, is gambling on an app different from betting in a casino?

Lewellen: The good thing, though, is that that digital paper trail makes it easier to keep track of your losses, too. If you go to the casino, you might not pay attention to how much you’re betting or your losses. And you can deduct your losses from your federal taxes if you itemize your deductions.

Many people do not itemize these days because taking the standard deduction has a bigger impact on what they owe. But people who bet in casinos should still make sure that they’re keeping track of how much they’re spending, in case they do want to itemize that.

North Carolina doesn’t allow taxpayers to deduct gambling losses. Why is it important that the state address that issue?

Goldman: One component of a good tax policy is that the tax can be expected and predictable. And I don’t think that’s the case when we don’t have this itemized deduction in North Carolina. Last year, when March Madness rolled around and online betting was legalized, the sports betting sites offered all these bonus bets, and a lot of people won money. There’s no way that they were thinking, “I need to hold four and a half cents of every dollar I made and lost and be able to pay that a year from now.” So there’s a huge disconnect. 

Lewellen: When I teach this in undergrad, one of the things that we talk about is horizontal equity, which looks at taxes in the context of other income and expenses. So if you look at one person who has $100,000 of gambling winnings and no losses, and then one person that has $100,000 of gambling winnings and $100,000 of gambling losses, those are taxed identically. The cash available is completely different between those two situations. That’s not equitable. It doesn’t take into account the ability to pay, and most tax policies are based on the ability to pay. 

On the first day of the 2025-26 session of the North Carolina General Assembly, lawmakers filed a bill that would allow itemized deduction of gambling losses.