The past year has been a banner one for the North Carolina Lottery, with the launch of digital instant games in November and sports betting in March.
Digital instants were wildly successful, bringing in $1.13 billion in sales in the eight months of the 2024 fiscal year, which ended in June. Sports betting, for its part, has generated $2.2 billion in sales (paid wagering revenue) in five months of operation.
Both digital instants and NC online sports betting have exceeded early projections, revealing the strength of the legal gambling market in North Carolina.
Digital instant games expected to generate billions in fiscal year 2025
In its 2024 fiscal year budget, the NC Lottery projected that digital instants would gross $182.3 million in sales. The games exceeded that estimate by 500%, helping the NC Lottery reach a new sales record even as sales from retail scratchers and lottery draw games declined slightly by 2%.
In just eight months, digital instants generated an average of $141 million in monthly sales, making up for the shortfall in scratchers and draw games many times over.
After paying out winnings, Van Denton, director of corporate communications at the NC Lottery, tells NCSharp that the state can report $146,194,911 in revenue for digital instants through eight months of play.
With this outstanding performance, the NC Lottery is increasing its 2025 fiscal year budget to $6.2 billion, which includes $2.2 billion in digital instant game sales.
The agency also plans to expand its portfolio of games and introduce multistate progressive jackpot digital instants in the second half of the 2025 fiscal year, according to Randy Spielman, deputy executive director of product development and digital gaming for the North Carolina Education Lottery.
The NC online lottery has digital instant games on its website or via the agency’s mobile app. Currently, players can access 27 different games, and the NC lottery changes the games often.
Sports betting still outpacing early projections
Lawmakers initially projected that the first full year of online sports betting could generate $3.9 billion in total bet spending (handle). To date, when considering promo spending and cash deposits, bettors have already spent $2.5 billion.
That spending has translated into $317,356,535 in gross wagering revenue (Revenue after payouts and before taxes and fees) for the state in five months.
And that’s through the “slow part” of the betting year.
As football season kicks off, betting handle will trend upwards, and the market will surely surpass the state’s initial projections by early fall. We may not see a 500% improvement on initial projections as with digital instants, but a 200% increase on state projections is entirely possible.
Despite lots of betting action, sportsbooks still in the red
Bonus offers and promotional spending factor into the revenues earned from digital instants and sports betting.
The NC Lottery doesn’t spend money on promos for its online lottery games like sportsbooks do on new customers.
Sports betting operators spent heavily on promotional offers to attract customers during March, the first month of legal sports wagering in North Carolina.
This heavy promo spending led to a shortfall in profits. The adjusted gross wagering revenue, which represents the gross wagering revenue minus money operators spent on promotional credits, reached $32.1 million in May. That comes in far below the $141 million in monthly sales from digital instants.
Fall looks promising for the NC Lottery
The state imposes an 18% tax on each sports betting operator’s gross wagering revenue. For the previous fiscal year, the state collected $49.5 million in sports betting taxes. The state “estimates total sports wagering tax and fee revenue of $74.9 million in FY 2024-25, increasing to $100.6 million in fiscal year 2027-28,” according to the North Carolina legislature‘s Fiscal Research Division.
According to the operator’s estimates released during its second-quarter earnings report, FanDuel has 59% of the market share, outpacing its online sportsbook competition by a large margin.
Market research firm Eilers & Krejcik Gaming ranks DraftKings second with a double-digit percentage market share and Caesars third. The remaining five operators each have less than a 5% market share.
The fall should boost sports betting as college football and NFL teams begin regular-season action. NBA play will follow in late October and NCAA basketball in early November.
So, as the year closes, digital instants and sports betting should provide the NC Lottery with a windfall in revenue and taxes.
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