HB 14, introduced by Rep. Erin Paré in early 2025, would close one of the sharpest edges North Carolina's tax code cuts against its own bettors: the state's refusal to allow gambling loss deductions. The bill is not yet enacted, but its potential impact — estimated at $17 million in deductions for 2024 at the 4.5% state rate — makes it worth understanding now, before you file or plan your wagering budget. We track this legislation closely because the tax treatment of sports betting winnings is among the most consequential and least-discussed aspects of legal wagering in this state.

For context on the full tax picture, see our detailed breakdown at NC Sportsbook Taxes: What North Carolina Bettors Owe, and for the legislative history that brought legal sports betting to NC in the first place, read Is Sports Betting Legal in North Carolina? The Full Story.

What does HB 14 actually propose?

HB 14 would allow North Carolina residents to deduct gambling losses on their state income tax filings, conforming NC's treatment to the existing federal rule. Under current federal law, bettors who itemize may deduct gambling losses up to the amount of their winnings — so a bettor who wins $10,000 and loses $10,000 in the same year reports net zero taxable gambling income federally. North Carolina does not honor that deduction. Under current state law, that same bettor still owes NC income tax on the full $10,000 in gross winnings, even though they broke even. HB 14 would eliminate that disparity, letting NC bettors apply their documented losses against their reported winnings before calculating the amount subject to the state's 4.5% flat rate.

Why does the current NC rule hit bettors so hard?

The mismatch between federal and state rules creates a situation where a bettor with a flat-zero net result still carries a real tax liability to Raleigh. At 4.5%, a bettor who grosses $10,000 in winnings over the year — regardless of losses — faces a $450 state tax bill before any federal obligation is calculated. Active bettors with high turnover and high gross winnings can owe meaningful state taxes even in years when they lost money on net. That is not a hypothetical edge case; the NCSLC reported approximately $6.6 billion wagered and $5.9 billion paid out in fiscal year July 2024–June 2025, a statewide hold rate of roughly 10–11%, which means most bettors, by definition, are net losers — and yet many still owe state tax on gross winnings.

Where does HB 14 stand right now?

As of early 2025, HB 14 has not been enacted. It remains a legislative proposal that bettors and operators are watching closely. The $17 million estimated deduction figure for 2024 represents the projected aggregate impact on NC state revenue if the bill passes retroactively or prospectively at the 4.5% rate — it is not a guaranteed outcome. NC bettors should continue filing under current law until and unless HB 14 is signed. State law can change; bonuses, tax rules, and legal status always depend on current NC law at the time you file. 21+. Gambling problem? Call 1-800-GAMBLER.

How does NC's loss-deduction policy compare to key alternatives?

Rule / Scenario Federal (Current) NC State (Current Law) NC State (If HB 14 Passes)
Loss deduction allowed? Yes — itemized, up to winnings amount No Yes — conforming to federal rule
Net-zero bettor's taxable gambling income $0 (losses offset winnings) Full gross winnings (e.g., $10,000) $0 (losses would offset winnings)
Estimated 2024 deduction impact Already available N/A — not permitted ~$17 million in aggregate deductions statewide

What should NC bettors do while HB 14 is pending?

Keep detailed records of every wager — date, amount, sport, outcome — because if HB 14 passes, documented losses will be necessary to claim any deduction. Even under current law, the IRS requires records to support any federal loss deductions you take. A W-2G form is issued when a single payout exceeds $600 and is at least 300 times the original stake; parlay bettors in particular should expect these and plan accordingly. Do not assume that breaking even means you owe nothing to Raleigh — under current law, you likely do.

If you are deciding which platform to use while monitoring this legislation, our team's operator comparisons are a useful starting point: Best NC Sportsbooks: Compare All 7 Licensed Apps. The NCSLC may license up to 12 online sportsbooks in total (8 venue-tethered, 4 standalone), plus up to 8 additional retail licenses at professional sports venues, so the operator landscape could still expand. For practical information on moving money in and out of your accounts, see NC Sportsbook Deposits and Withdrawals Explained.

Disclosure: NC Sportsbook may earn a commission if you open an account through links on this page. That never changes our ratings or the facts we report.