The NC Lottery Commission approved a series of recommendations from its sports betting committee to Wednesday’s second round of proposed sports wagering and parimutuel rules. The list of topics on the agenda included affiliate marketing revenue and the submission of proof that operators are in good standing in other jurisdictions.
With the end of the year rapidly approaching and a Dec. 27 recommended submission date for sports betting operators to submit applications, the commission is on an expedited schedule.
After several meetings and a public comment period, the agency approved the first set of rules, Rulemaking One, in mid-November. Rulemaking Two went through the same process, and the draft presented Wednesday was the final result of 150 public comments, staff recommendations, grammatical corrections and style edits.
The rules take effect on Jan. 8, 2024, while a North Carolina online sports betting launch date is still pending but won’t come before the 2024 Super Bowl on Feb. 11.
Affiliate marketing compensation structure approved
Sports betting operators and affiliate marketers have a symbiotic relationship. The affiliates produce editorial content and receive commissions when site visitors click through links to online sportsbooks. The affiliates receive compensation via revenue sharing and/or cost-per-acquisition, depending on the state.
The NCLC’s sports betting committee recommended prohibiting revenue-sharing agreements that compensate affiliates “based on net sports wagering revenue earned from players the marketer drives to the wagering platform.” It gave a green light on CPA compensation. The commission approved the committee’s recommendation Wednesday but said they may return to the ruling later.
Operators must be in good legal standing in other jurisdictions
As is standard in states where online sports betting is legal, operators applying for a license in NC must provide gaming control agencies with a list of jurisdictions where they legally participate in gaming operations in the U.S. The licensing details on the list must include:
– The type of license.
– The type of gaming activity authorized.
– The date of licensure.
– The license expiration date.
In addition, operator applicants must prove that they are in good standing in those locations by submitting a certificate of good standing from the relevant gaming control agency.
The initial draft of Rulemaking Two stipulated that sports betting operators provide certificates of good standing for jurisdictions for the last six months of operations. The sports betting committee suggested changing that time frame to one year and the NCLC approved the recommendation.
“We would like to provide more flexibility here for our accepting of these certificates or letters of good standing issued within the past year,” said Sterl Carpenter, deputy director of sports betting for the NCLC.
Approved rules can go into effect next month
As stated, the approved rules can go into effect on Jan. 8. However, the NCLC has not announced a sports betting launch date yet though NCSharp projects that a March Madness 2024 launch could be in the cards.
As of Wednesday, 14 operators, 10 service providers and 34 suppliers have requested applications. Only 11 operators will be approved.
Three sports betting companies have already paved the way to submitting a successful application by announcing partnerships with pro sports entities in the state, fulfilling a prerequisite to obtaining an NC license: Bet365 (Charlotte Hornets), ESPN Bet North Carolina (Quail Hollow Club) and Fan Duel (PGA Tour). It is expected that DraftKings, BetMGM, Caesars and Fanatics will be among the other operators approved for a license. BetMGM announced NC as a priority for expansion last week.
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