It seems that North Carolina legislators learned from last year’s failed attempt to legalize online sports betting in the state.
This year’s bill has key components replicating parts of other states that already have sports betting. Because of that, sports betting in North Carolina could end up looking similar to industries from other areas.
All things considered, it’s a good thing for bettors in the state that lawmakers have been taking notes. It will help this year’s push for legalization avoid the blunders of the past.
Learning from last year’s mistakes
To gain approval in 2022, it would have taken two bills to set up North Carolina’s industry. When one failed by a single vote, it didn’t matter whether the second bill passed. Lawmakers also approved an amendment that disallowed college sports betting.
Some lawmakers were critical of having to pass two bills to legalize sports betting last year. This time around, legislators took key aspects of both bills and crafted one bill that addressed the concerns from last year.
The bill filed this week, House Bill 347, allows for college sports betting, including wagering on in-state teams. Revenue from online sports betting is taxed at 14% (the original bill last year started at 8% before it was amended). It also provides $2 million for problem gambling programs and permits 10-12 online sportsbooks.
College sports betting was a sticking point in 2022, and it was amended out of the legislation. It’s in this year’s bill.
All of this is similar to how other states do things.
College sports betting in North Carolina
North Carolina’s neighboring states with legal online sports betting, Tennessee and Virginia, have different allowances for college sports betting.
Tennessee, which launched its online sports betting market in November 2020, allows for all college sports betting. That includes betting on in-state teams such as Tennessee and Vanderbilt.
Virginia, which went live with online sports betting in January 2021, permits wagering on colleges except for in-state teams. So with Virginia a team to watch in this year’s March Madness, state residents can’t place a bet on the Cavaliers.
The most recent state to launch online sports betting, Massachusetts, allows college sports betting. You can’t bet on state teams, however, unless they are in a tournament with at least four teams. It permits betting on state schools in their conference tournaments or in the NCAA tournament.
If betting on college sports is again an issue in North Carolina, it can look at Massachusetts for a compromise that could alleviate the concern.
North Carolina sports betting tax rate is lower
North Carolina’s neighbors have a slightly higher tax rate on revenue from online sportsbooks. Virginia’s rate is 15%, and Tennessee’s is 20%. The North Carolina bill has a 14% tax rate on operators.
Gov. Roy Cooper indicated last year the original proposed tax rate of 8% was too low, and it was amended to 14%. It still pales in comparison with New York’s 51% (as do most states), but it is on par with the US industry.
Another southern state, Louisiana, has a 15% tax rate on online sports betting revenue. Kentucky’s bill, which just passed the House, has a tax rate of 14.25%. One of the sports betting stalwarts, New Jersey, taxes online at 13%.
When this year’s bill is debated in North Carolina, it would not be surprising to see the rate increase slightly. It should not be an issue, however, when it comes to passing the bill.
Number of online sportsbooks allowed
Virginia allows for up to 18 online sportsbooks (15 are live and another is approved). Tennessee didn’t set a limit on online sportsbooks but currently has 12 live.
North Carolina’s bill allows for 10 to 12 online sportsbooks. It will permit sports betting lounges at professional sports facilities in the state. There are currently three retail sportsbooks at tribal casinos in North Carolina.
The number of online licenses available in North Carolina is reasonable. Maryland, which launched online sports betting in late 2022, allows for up to 60 online sportsbooks. Rest assured, there won’t be that many. There are currently eight live in Maryland.
When it comes to regulating the potential industry, North Carolina plans to do things similarly to Virginia and Tennessee. State lotteries run the show in both states, and North Carolina’s bill proposed that the North Carolina Education Lottery should regulate sports betting.
New Jersey, Colorado, Michigan and Arizona have separate departments that regulate their sports betting industries.
Will North Carolina approve online sports betting this year?
It does seem that this year’s North Carolina bill mirrors some of the key aspects in other legal sports betting states. Lawmakers tried to address the concerns of legislators who opposed the bills last year.
“There is a general expectation that some of the issues and concerns that derailed a sports betting bill in last year’s legislative session can be addressed this year and in a way that gives the bill more of a chance to pass this legislative session,” John Dinan, professor of politics and international affairs at Wake Forest University, said in an email.
Bill Squadron, an assistant professor of sport management at Elon University, said it’s not surprising lawmakers crafted legislation this year that addressed opposition concerns after last year’s narrow defeat.
“The hesitation in many states – given our long history of sports betting being illegal in the U.S. – is not surprising, and it is to the. credit of lawmakers to be thoughtful and careful in opening up this new market.”
HB 347 awaits a hearing in the House Commerce Committee. If approved, it would head to the House Finance Committee.