Many people watch the World Series and the National Basketball Association (NBA) finals and are glued to the TV screen. But bet on your favorite team. Your state may come for those prizes.
Online sports betting has grown in recent years, with the American Gaming Association reporting a record $3.87 billion in the first few months of 2025.
However, with the increase in sports betting, there is an unfortunate possibility of higher taxes on gambling victory and losses. Federal tax policies remain the same. But the state legislature is looking for ways to capitalize on the popularity of the industry.
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This is the state that recently increased or proposed bills to raise the sports betting tax in 2025.
Increased tax on sports bets
Kiplinger used the online sports betting tax rate from the Tax Foundation to determine which states are currently enacting sports betting tax. Data was then collected and compiled for states that have recently increased or are considering a current increase. here it is.
*Note: Sports betting is not legal in all 50 states. Check your local laws before placing your bet.
Colorado Online Sports Betting
Colorado Governor Jared Police recently signed the law to eliminate BET tax incentives that could affect all Centennial sportsbooks.
Currently, sportsbook operators can deduct a certain percentage of “free bets” from their taxable revenue. However, HB 1311, backed by bipartisan sponsorship, will gradually eliminate that deduction until it is completely abolished by July 1, 2026.
Colorado already taxes online sports betting at a 10% tax rate, making it the 19th most expensive state tax in the United States, according to data from the Tax Foundation.
And the new law is expected to reduce the number of promotions offered to bettors, thereby increasing state tax revenue. Some speculate that this will make American sports betting operators less attractive than offshore operators.
Anyway, the new Sports Betting Act came into effect on July 1, 2025, with free betting deductions being limited to just 2% per month. On January 1, 2026, the rate fell again to 1% before it completely disappeared in July 2026.
Illinois Sports Betting Fees
According to the Tax Foundation, Illinois’ sports betting tax is the 12th highest in the nation. However, starting from July 1, 2025, Lincoln Land will add yet another online sports betting tax.
Currently, Illinois Sportsbooks are taxed on the Adjusted Total Sports Betting Receipt (AGSWR) tier system.
The first $30 million in AGSWR will be taxed at a 20% tax rate. AGSWR is taxed at 25% between $30 million and $50 million. AGSWR is taxed at 30% between $50 million and $100 million.
Under the new law there is an additional 25 cents tax levied on sportsbooks for the first $20 million online sports betting imposed in the fiscal year each year.
Bets placed above that amount double the tax to 50 cents per unit.
The new law has urged large operators like Fundael to announce a 50-cent trading fee for all online bets placed in Prairie State.
CNBC News also reports that Draftkings “anticipates taking action (to reduce taxes) and hopes to share more information soon.” In short, sports betting may be more expensive in Illinois.
Louisiana Sports bet online
Louisiana may soon be taxing online sports betting.
Sponsored by Rep. Neil Riser (R-Columbia), HB 639 will increase sports gambling in Bayou from 15% to 21.5%. A quarter of the increase will support university athletes at public universities in Louisiana.
This funding can be used for scholarships at the NCAA Division I level, insurance, health insurance, facility improvements, and other student-athlete expenses.
But with a high 21.5% percentage, Louisiana could hit the fifth state by betting the state fifth, according to tax law.
However, the bill has already passed both the House and Senate, and is expected to be signed into law by Gov. Jeff Landry.
Legal Online Sports Betting in Maryland
Maryland recently raised its online sports betting tax on July 1, 2025.
HB 352, part of the state’s budget adjustment and funding law, will raise the mobile sports betting tax from 15% to 20%. Though not as dramatic as the 30% tax proposed previously, this rate could have fewer unattractive odds or less opportunities for bettors to promote.
Sports bet operators are generally opposed to tax increases due to potentially lower payments for bet victory and less funds for free bets and other promotions (by the national meeting of state legislatures).
Others speculate that sports betting operators will take over the higher tax rates to consumers.
However, it is important to note that sports bets in Maryland remain at 15% even after July 1st. According to data from the Tax Fund, the Free State currently has the 12th highest sports bet tax in the nation.
Massachusetts sports bet legality
Massachusetts is considering increasing its tax on online sports betting from 20% to a whopping 51%. This makes Bay State one of the worst places for tax sports betting, according to the tax base.
The “Better Health Act,” proposed by Sen. John Keenan (D-Quincy), raises the tax rate on sports betting to address “the economic, health and social harm caused by sports betting.” The bill bans prop bets (event-specific bettors in the game) and sets daily and/or monthly betting limits.
However, it is important to note that a similar attempt was made by Keenan last year and did not gain support in the state Senate.
Bettors can place bets on basketball, soccer and baseball via online sports bets.
(Image credit: Getty Images)
Can I place a sports bet in New Jersey?
Earlier this year, New Jersey Governor Phil Murphy proposed an increase in the online sports betting tax rate.
The proposal, which is included in the state’s budget plan, will almost double the state tax, from 13% to 25%.
Additional revenues can address the projected budget deficit and increase funding for programs that benefit seniors and people with disabilities.
However, New Jersey currently has the 16th highest sports bet tax in the country, according to the Tax Foundation. Some speculate that increased taxes on sports betting operators could be handed over to consumers, and could have a negative impact on the industry.
Is sports betting legal in North Carolina?
North Carolina’s sports bet tax is the 11th highest in the US, with 18% per tax fund data. But that doesn’t mean that state lawmakers don’t consider state sports tax increases.
The sports bet tax rate could double thanks to budget proposals from the North Carolina Senate.
The state senator estimates that the tax rate hike could generate only $53.4 million in the next fiscal year. Additional proceeds can be used to fund the university’s athletics department and the youth outdoor engagement committee.
However, the North Carolina House budget proposal would not raise the state’s sports betting tax rates, suggesting potential disagreements about policies within the state House and Senate Republican majority.
The goal is to finalize the state’s budget by July 1, 2025 and submit it to North Carolina Governor Josh Stein for approval.
Ohio State Tax Bill on Sports Betting
Ohio lawmakers may make history with the state’s new sports betting tax.
Introduced by Senator Louis Blessing III (R Corrain Township), SB 199 adds a 2% tax to the “betting handle” (total bets by bettors). The tax will be the first state to tax both the sports betting handle and revenue in Ohio, in addition to the usual 20% tax on gambling revenues for online sportsbooks currently enacted by Buckeye State.
The funds raised through the tax hike support extracurricular activities in public sports facilities, intergroup athletics and public schools.
However, this is not Ohio’s first rodeo, and it is proposed to raise taxes on gambling.
Earlier this year, Ohio Gov. Mike DeWine proposed double the sports betting rate to 40% as part of his budget bill. Though the latest tax proposals aren’t exactly the same, DeWine’s bill has received significant backlash from Republican lawmakers.
According to tax law, their state is already ranked as the sixth highest online sports betting tax rate in the country, so this may be good news for Ohio bettors.
Sports bets in Wyoming
Wyoming’s Legislative Commission proposes to raise the state’s sports betting tax rate in 2025. The proposal doubles the online sports betting tax rate to 20%.
According to a local news outlet, the bill will be part of a wider push to raise taxes on state gambling, including skills-based amusement games and historic horse racing.
This could harm the relatively low 10% tax rate in Cowboys State.
However, the bill is still drafted and will be considered at the next legislative meeting.
