Online sports betting in North Carolina comes with HB347
The North Carolina The General Assembly adopted a sports betting account, House Bill 347, on Wednesday, June 8, 2023. The legislation now goes to the desk of Gov. Roy Cooper (D), who has indicated he will sign it into law. Although sports betting was already legal in the state’s two tribal casinos, the new bill would expand it to retail venues in gyms and online.
About the new law
Under the terms of HB347The North Carolina Education Lottery Commission will be charged with regulatory oversight of the sports betting industry. It will be empowered to license operators and establish rules for the industry.
Three types of licenses are available. Operator licenses for interactive sports betting are limited to a total of 12. These are the primary licenses that will allow companies to provide online sports betting services in the state of North Carolina.
Service provider licenses are required by those entities that create betting markets, assess results and manage bets on behalf of an interactive sports betting operator. Sports Betting Provider Licenses will be required by those who supply software, services and other goods to interactive sports betting operators.
Governor Roy Cooper is expected to sign the Sports Betting Act into lawIndian tribes already permitted to accept sports betting on tribal lands may apply for interactive sports betting operator licenses to be able to accept wagers from patrons located off tribal lands.
Eight sports facilities will be allowed to partner with interactive sports betting operators to accept sports bets at so-called “venues of public accommodation”. They are permitted to host such places of public accommodation on the property of the sports facility and are further permitted to have one such place within a one-half mile radius of the sports facility and another within a one-and-a-half mile radius of the sports facility.
The eight sports facilities that will be allowed to offer retail sports betting are:
- Bank of America Stadium in Charlotte (home of NFL’s Carolina Panthers and MLS’s Charlotte FC)
- Charlotte Motor Speedway (home of NASCAR racing)
- North Wilkesboro Speedway (home of NASCAR racing)
- PNC Arena in Raleigh (home of the NHL’s Carolina Hurricanes)
- Quail Hollow Country Club in Charlotte (home of PGA Tour events)
- Sedgefield Country Club in Greensboro (home of PGA Tour events)
- Spectrum Center in Charlotte (home of NBA’s Charlotte Hornets)
- WakeMed Soccer Park in Cary (home of the NWSL’s North Carolina Courage)
Revenue and distribution of funds
The cost of applying for an interactive sports betting operator license is set at $1,000,000. A service provider license costs $50,000, while a sports betting provider license has a fee of $30,000. If any application is rejected, the applicant will receive a refund 95% of the fee. Licenses are valid for five years, but can be renewed for another five years at the same price as they originally cost.
These license fees may be used by the Commission to offset the costs of administering the regulated sports betting framework established by law. Any additional funds will be placed in the state’s General Fund at the end of each fiscal year.
In addition to license fees, interactive sports betting operators will be subject to an 18% gross betting revenue tax paid monthly. The funds collected from this tax will be distributed as follows:
- The Lottery Commission can retain up to $500,000 per year for administrative expenses related to sports betting
- $2,000,000 annually for problem gambling education and treatment
- $1,000,000 annually for youth sports grants
- $300,000 annually to support college athletic programs
- $1,000,000 each year for grants to allow sports teams to travel to events and attract sporting events to the state
- Of the other funds:
- 20% to college athletics
- 30% to the North Carolina Major Events, Gaming and Attractions Fund, which will seek to stimulate economic activity in the state by attracting major events with a view to boosting the travel and tourism sectors
- 50% to the General Fund
Rules and restrictions
Sports betting will only be available to those 21 or older who are located within the borders of North Carolina. Members of the Lottery Committee will not be allowed to place bets, and employees of a licensee may not place bets on their own betting platform. Participants in sporting events, including coaches and officials, are prohibited from betting on events in which their organization participates.
Beyond these limitations, the menu of options available for sports betting in North Carolina will be extensive. Wagering is allowed on college sports, including NC teams. Betting on eSports and amateur sports is also allowed. The only types of bets specifically prohibited by the bill are:
- Youth sport
- Bets on injuries, penalties, disciplinary proceedings against an athlete or results of re-examinations
The Lottery Commission is authorized to punish violations of the rules by suspension of licenses, revocation of licenses, or a fine of up to $10,000 for each violation.
Official league data
North Carolina is one of the few states to embrace the idea of official league data. It’s a provision that sports governing bodies have tried to implement into sports betting legislation across the country. It forces sportsbooks to use data officially provided by either a league or its authorized entity when pricing bets on that sport.
In North Carolina, bets that depend only on the final score or outcome of the game and are placed before the start of the competition do not require official league data. Neither are bets on events taking place outside the United States. All other bets are subject to the use of official league data, although the sport’s governing bodies must formally request and receive approval from the Lottery Commission before sportsbooks are required to comply.
There are certain instances in which sportsbooks will be able to avoid using official league data, such as when such data is not provided by the league or if it is not available “on commercially reasonable terms.” This commercially reasonable language echoes that of the 2019 Tennessee legislation that legalized sports betting in that state.
Other bets
HB347 deals primarily with sports betting and doesn’t really expand many other types of gaming. Thus, online casinos are not covered by it, nor will online poker sites be licensed under the provisions of this bill.
However, betting on parimutuel advance deposit accounts is also legalized by the bill. Licensees will have to pay $1,000,000 for a five-year license and will also have to hand over 1% of the manipulation annually. This money will be used to offset the expenses of the Lottery Commission with the balance placed in the General Fund. Only those over the age of 21 who are North Carolina residents will be able to participate in ADW activities.
The road to legalization
While some other jurisdictions, such as West Virginia and New Jersey, were almost ready for sports betting as soon as the Supreme Court’s landmark Murphy v. NCAA decision was handed down in May 2018, things didn’t move so quickly in the Tarheel State.
Previous attempts
It took more than a year for even limited sports betting in North Carolina to be legalized with SB154 in July 2019. This created retail-only sports betting in only a few tribal locations in the state. Almost immediately there were calls to expand the industry.
That’s what state Rep. Jason Sain (R) tried to do in 2021, along with his college Sen. Jim Perry (R). Their bill passed the Senate, but the House did nothing. The following year, the bill failed to pass the House by a single vote.
State Representative Jason Sain was instrumental in bringing sports betting to North CarolinaHB347 is making its way through the Legislature
In 2023, Sein tried again, filing his bill on March 13. It went through three readings in the House, passing the third reading on March 29, 64–45. There, it continued through the Senate, seeing a 37–11 vote on third reading on June 1.
The Senate made several changes to the House version of the bill, most notably raising the tax rate from 14% on gross gambling receipts to 18%. Consequently, the bill had to go to the House for approval, which was achieved on June 7 by a vote of 69 to 44.
HB347 was then presented to the governor on June 9. The governor has 10 days to act by either signing it into law, vetoing it or allowing it to become law without his signature. Should Governor Cooper veto the bill, his decision could be overridden by a three-fifths vote in each chamber.
However, a veto is unlikely. The governor has already indicated that he supports sports betting and intends to sign the bill.
I’m moving forward
Under the legislation that has just been passed, the earliest date any sports betting license can become valid is January 8, 2024. However, the final determination of the launch date is left to the discretion of the Lottery Commission as long as not later than 12 months after HB347 becomes law. Both of those stipulations together mean we’re looking at a time frame between January 8 and mid-June of next year for the launch of non-tribal sports betting in North Carolina.
According to a fiscal memo from the North Carolina General Assembly, the state’s sports betting revenue is expected to reach $100 million annually in five years.
It might be helpful to look at the sports betting market in neighboring Virginia, which launched in January 2021. For calendar year 2022, Virginia saw $4.9 billion in sports betting, generating $481 million in revenue. If that revenue were subject to North Carolina’s 18% tax, it would result in $87 million in taxes.
North Carolina’s population is about 10.7 million, comparable to but larger than Virginia’s 8.7 million. Thus, projections of a possible $100 million in annual sports betting taxes seem quite reasonable, and perhaps even a little pessimistic.
NC sports betting is possible today
We’ll likely have to wait the better part of a year before the first regulated online sports betting hits North Carolina. However, there are several offshore bookmakers doing business in the state, and you can sign up with one of them today and start betting. There are no laws against betting with these sites – at least no laws that apply to regular bettors.
To learn more about your options in this regard, see this page on online sports betting in the USA. Or if poker is more your game, read this online poker guide for US players. Casino gaming enthusiasts may prefer to learn about the best internet casinos suitable for the USA.