North Carolina senators are resuming their work on legislation that would legalize online sports betting sites in the Tar Heel State — and have already made significant changes to the bill.
Members of the North Carolina Senate’s commerce and insurance committee met Wednesday to consider House Bill 347, which, if it becomes law, would allow up to 12 mobile bookmakers to offer legal sports betting.
The Commerce and insurance committee approved HB 347 with amendments, sending it to the Senate's finance committee for further scrutiny. The tweaks proposed include increasing the state's tax rate to 18% from 14%, allowing in-person sports betting at or near professional sports venues, and legalizing pari-mutuel wagering on horse racing.
“Betting on sports in our state is occurring,” Sen. Timothy Moffitt said during Wednesday’s meeting. “But in order for us to regulate it, in order for us to tax it and provide a public benefit from those taxes, we have to authorize it first.”
Another change made by the committee on Wednesday was eliminating any deduction of free bets or other promotions from taxable revenue. H.B. 347 passed the House of Representatives near the end of March, punting the issue to the Senate, where it received its first reading on March 30. If the bill remains amended, it must head back to the House for approval.
Back to the House
It was in the House that broader North Carolina sports betting met its demise in the state last year, as the lower chamber failed to pass mobile-wagering legislation following Senate approval. This time, it will be up to the upper chamber to advance online sports betting to the legislative finish line. North Carolina has legal sports betting at three casinos but no legal online sportsbooks.
H.B. 347 would put online sports betting under the oversight of the North Carolina State Lottery Commission. The legal betting could begin no earlier than Jan. 8, 2024, which would at least mean wagering on the NFL playoffs and next year’s Super Bowl is a possibility.
Residents would have to be 21 or older to wager, but they could bet on professional, college, and amateur sports. The legislation also explicitly permits “single-game wagers, teaser wagers, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play wagers, proposition wagers, straight wagers, and any other wager approved by the Commission.”
Operators would have to pay $1 million for a five-year license and a now-18% privilege tax. That tax would be applied to gross revenue, or total wagering minus the amount paid as winnings to bettors.
The money generated by mobile sports betting would flow to a few different sources, including $2 million a year for problem-gambling programs. Funds would also go to a “North Carolina Major Events, Games, and Attractions Fund,” to provide grants intended to draw events to the state.
The North Carolina Senate’s commerce and insurance committee has favorably reported HB 347, an online sports betting bill, with some amendments, such as increasing the tax rate to 18% from 14%. The legislation will now head to the Senate's finance committee for further scrutiny. pic.twitter.com/9FKy0qAz1Y
— Geoff Zochodne (@GeoffZochodne) May 24, 2023
Exactly how much online sports betting could mean in tax revenue for North Carolina remains to be seen. Several estimates have been floated, including $85 million over the next two fiscal years included in pro-sports betting Gov. Roy Cooper’s budget.
The North Carolina General Assembly's Fiscal Research Division forecast $2.9 million in tax revenue for the 2023-24 fiscal year, which was projected to rise to $17.8 million in 2024-25, $24.7 million in 2025-26, $35.6 million in 2026-26, and then $45.4 million in 2027-28. The division also estimated more than $20 million in fee revenue in the first two years.
There is no guarantee H.B. 347 passes the Senate, even if it did clear the chamber last year. Debate in the House showed there are lawmakers still concerned about problem gambling, and the Senate’s commerce committee heard Wednesday from social-conservative groups that would like to see the legislation blocked.
“Conservative estimates suggest that North Carolina can expect to see tens of thousands more of our state's citizens and their families victimized by gambling addiction if this bill is enacted into law,” said John Rustin, president of the North Carolina Family Policy Council.
The council is a nonpartisan, nonprofit organization whose website says it is “engaged in a battle to retain the Judeo-Christian values that are the foundation of western civilization.”
