Casinos Are Dead And Other Gambling Changes In NC State Budget

North Carolina sports betting regulations, along with casino expansion and lottery games, could all be impacted by the state budget.

In the waning days of budget negotiations, the impact on North Carolina legal gambling is clarifying, and while focus on casino and video lottery terminal expansion ultimately came to nothing, sports betting changes could impact the number of operators in the state and the role pro sports teams play in the licensing process.

North Carolina sports betting could launch as soon as Jan. 8, 2024, though the NC Lottery Commission has yet to accept an application and is still in the process of creating a licensing framework.

Here is a look at the major changes to casino expansion, digital lottery games and NC sports betting proposed in current draft budget bills.

Budget bill would remove cap on operators, empower pro teams

When House Bill 347 was signed into law in June, the legislation proposed “no more than 12 interactive sports wagering operators” in the state.

Those 12 operators would not be tethered to any pro sports team or casino in the state. The state would consider certain factors as the operator’s relationship with a pro sports team and its history of investment in the state, but it would not mandate them.

The state’s new budget proposal would drastically change the approach operators would take to apply for a license. This approach shifts the power to sports teams and sports facility owners.

In order to receive an online operator license under the new budget proposal, operators would have to receive a “written designation agreement” with a pro sports team, the owner of a sports venue or a PGA or NASCAR venue.

Said agreement would also imply that the operator who made the written agreement with the pro team or venue would also have the go ahead to run that team’s/venue’s retail sportsbook.

With five pro sports teams, two PGA courses and two NASCAR racetracks, it is unclear whether the budgetary changes to the gambling law would allow for more or fewer sports betting licenses than the previously-proposed 12.

Digital video lottery games outlawed under budget proposal

Last month the NC Education Lottery approved the sale of digital instant lottery games, which would go live on Nov. 15 of this year.

The proposed budget appears to contain language that could stop that launch in its tracks.

In a section titled “Limit Online Lottery Games”, the budget proposal outlines prohibited forms of digital games that mimic Vegas-style casino games.

The NC Education Lottery has not specified which types of digital games it will offer, and there are many. It has, however, likened the product to a “digital scratch-off ticket.” If that is the game on offer, it may not bite the restrictions the new budget will place on prohibited digital games: operate as slot machines, employ a weighted reel, use casino-style graphics, have one or more pay lines.

Regardless of what the lottery intends to launch on Nov. 15 and whether it would violate new budgetary law, this proposal would significantly hinder the Lottery’s ability to expand its revenue streams from digital gaming, which it has projected to net $400 million in the first five years.

The NC Education Lottery declined to comment on the impact this draft could have on their digital lottery gaming plans.

Stand-alone casino bill called off in 11th hour

The stand-alone bill tying the expansion of four new casinos to increased Medicaid funding, and opening the state to multiple casino developers died after lawmakers could not muster the support.

The draft bill stated that a single or multiple “businesses” could apply for licenses to develop the new casinos. While it ultimately failed, the language of the bill is important to consider as it could form casino legislation in 2024.

In opening up the state to multiple casino developers, the draft bill appeared to increase competition, but the other parameters for a developer suggest otherwise. Namely, a developer has to have ten years of experience in the gaming industry and ten years of experience offering non-gaming, mixed-use real estate development. There are also location requirements that seem to point at three counties–Anson, Nash and Rockingham–for casino expansion. A fourth casino would be authorized to the Lumbee Tribe.

As Matthew Kredell at PlayUSA pointed out, these parameters still gave “Baltimore-based casino developer and operator Cordish Cos. a monopoly. Other casino companies wouldn’t meet the real estate requirement.”

We will be following how the legislature plans to attack casino developer licenses in the 2024 legislation in light of this year’s attempt.

Despite coming up short in 2023, North Carolinians support casino expansion

NCSharp conducted a survey in late July gauging interest among North Carolinians in casino expansion. Our survey found that 45% of respondents supported casino expansion with 29% opposed it and 26% remained indifferent. While respondents were concerned about problem gambling, the potential revenue from casino expansion outweighed the risk.

Lawmakers will vote on the state budget on Thursday and Friday.

About the Author

Tyler Andrews

Tyler is the Managing Editor for NCSharp.com, covering sports, sports law, and gambling for the Tar Heel State. He has also covered similar topics for PlayTexas, PlayGeorgia, PlayCA, PlayFlorida, PlayOhio, and PlayMA. Tyler’s current focus is North Carolina’s pathway to gaming legalization.