The Republican-held North Carolina state legislature finally agreed on a budget that does not include casino expansion but does make substantial changes to the way sports betting operators gain access to the North Carolina market.
With this new budget in place, North Carolina pro sports teams, sports venues and both the PGA and NASCAR will gain considerable control over which NC sportsbooks launch in 2024.
Gov. Roy Cooper, a Democrat, says he will allow the budget to become law without his signature.
Sports betting changes in state budget
The major news on the North Carolina sports betting front is that the budget will, for the time being, lower the total number of online operators by one, but it will also remove the 12-operator cap.
House Bill 347, North Carolina’s online sports betting law, previously allowed for up to 12 online operators in the state. Those operators would not need to establish a partnership with another entity–a casino, pro sports team, pro sports venue–in order to gain market access to North Carolina. They would simply apply and be accepted on the basis of their portfolios.
The budget changes that process, now requiring all applicants for a sports betting operator license to first obtain a “written designation agreement” from a specified entity. Each of those entities could only offer one written agreement.
The entities listed in the state budget:
- a professional sports team
- the owner/operator of a motorsports facility
- the owner/operator of a facility that holds annual professional golf tournaments
- a sports governing body that holds more than one professional golf tournament a year in the state
- a sports governing body that sanctions more than one NASCAR race a year in the state
Doing the math, there are five pro sports teams (Charlotte Hornets, Carolina Panthers, Carolina Hurricanes, Charlotte FC and NC Courage), two motorsports facilities (North Wilkesboro Speedway and Charlotte Motor Speedway), two professional golf courses (Sedgefield Country Club and Quail Hollow Country Club), the PGA and NASCAR. That makes for 11 total sportsbooks.
NCSharp reached out to James Hallas, senior manager of commercial communications at NASCAR, for clarification on this total. Hallas confirmed that the new law would allow for 11 total sportsbooks, lowering the total proposed in HB 347 by one. Despite lowering the total number of operators, this change shouldn’t impact North Carolina sports betting revenue at all.
Clarifying retail sportsbook partnerships
The budget also changes the parameters around HB 347’s designation of retail sportsbooks at sports venues. Under the budget, only the operator that makes the written agreement with the venue or sports team would be allowed to build a retail sportsbook on site.
When asked how the changes would affect the development of retail sportsbooks at the state’s two racetracks, Hallas noted that requiring an operator to sign a written agreement with one of these designated entities “makes it easier for a place like North Wilkesboro to get a retail sportsbook built.”
In effect, the budget changes now require operators to go through the state’s established sports entities and venues to gain access to the North Carolina expanded retail, online and mobile sports betting markets.
Because the budget does not cap the total number of operators at 12, these changes also leave the door open to possible MLB expansion into North Carolina and the opportunity for an MLB team in Raleigh or Charlotte to secure a sports betting partnership in the future.
Casinos and video lottery terminals shut out of budget
Not enough Republicans could be convinced to throw their support behind casino expansion efforts, and instead the budget removed all language around new gaming areas in the state.
A bi-partisan block of lawmakers had pushed for so-called “rural-tourism districts” that they say would pump revenue into other areas in North Carolina. Currently, the three NC casinos are all located in the western part of the state.
NCSharp conducted a survey that found that 45% of respondents supported casino expansion while only 29% opposed it.
The 2024-2025 budget also did not legalize video lottery terminals, which some proponents wanted for added revenue from the popular state lottery.
Divide over need for expanded gambling
Ultimately, 2023 couldn’t be the year for both legal online sports betting and casino expansion in the state.
The stalemate on expansion of casino gaming and video lottery terminals comes at a time when some, like Republican State Rep. Jason Saine, are calling for iGaming in North Carolina.
The $30 billion state budget was passed essentially on party lines, with Democrats sticking with Gov. Cooper on most issues.
North Carolina sports betting is scheduled to launch sometime between Jan. 8, 2024, and June 14, 2024. These changes, which the North Carolina Lottery Commission, regulator of the industry, will now have to field in stride, will likely mean a launch nearer the end of the window than the opening of it.
When the state does launch, NCSharp projects that the state could take in $6-$7 billion in total bets in its first year of online sports betting.
NCSharp will follow these developments closely as the NC Lottery begins the process of holding sports-betting focused meetings.
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