The North Carolina Lottery Commission announced updates to the sports betting regulatory process in a public meeting Wednesday afternoon.
Among the most important tasks facing the commission is the implementation of a licensing process for gambling operators who want to offer retail and online sports betting in North Carolina.
Implementing a sports betting license application portal
After introducing himself, Sterl Carpenter, the commission’s newly-appointed deputy executive director of gaming compliance and sports betting, gave a general outline of how the commission planned to roll out a portal for operators to submit applications.
“I will do my very best to make everything run smooth and compliant with our rules that we will put together,” he told commissioners.
Carpenter, who helped oversee the successful licensing process in Massachusetts, assured the commission that the system would be able to handle initial licensing, renewals, providing reporting functions all while maintaining security.
The licensing platform to expand sports betting at facilities other than Native American-owned casinos must be in place by June 14, 2024, per state law.
Commission plans to hire contractor to build licensing portal
“We need to have a rapid implementation of this software product to get up and running before the June deadline,” Carpenter emphasized when presenting a timeline for selecting a contractor to handle building the licensing portal.
The commission issued a request for proposals on August 9. Interested parties had until Sept. 6 to submit proposals. Product demonstrations took place between Sept. 11 and 15. The commission has a target date of Sept. 27 for selecting a contractor.
Carpenter’s presentation specified that the portal project would begin immediately after contract approval. There was no date given for the launch of the licensing portal.
The commission declined to provide details on bidders and bids “to protect the process.”
Details of Gaming Laboratories International Contract Revealed
In mid-August, the commission hired a gaming lab and certification company to assist in the sports betting expansion. Gaming Labs International came on board “after a competitive procurement process,” according to Carpenter.
The deliverables for the initial contract states that GLI would provide the following:
- Implementation services (regulatory expertise, design of protocols, technical documents and on-call support).
- Professional development and training
- Responsible gaming program development including self-exclusion.
In Wednesday’s meeting, the commissioners approved an amendment to that original contract to also include:
- Implementation services such as advanced deposit wagering licensure and development of pari-mutuel and horse-racing rules.
- Evaluation and recommendations for internal control review standards proposed by operator applications on a fixed-cost review.
- An option for additional professional development and training.
Commission approved $400,000 amendment to GLI contract
The initial value of the contract for GLI was $149,000. The amendment added an additional $422,000 for a total of $571,500 that the commission plans to spend for GLI’s services for a year.
The costs can go down Carpenter noted “because we’ve used a 12-month engagement with exercising the additional training in a fixed cost to up to 15 operators.”
The funds to pay for GLI’s contract come from the following sources:
- Sports betting license fees
- Advance deposit wagering license fees
- Sports wagering tax funds
To cover the initial operating costs, the commission “may ‘borrow’ funds from the State Lottery Fund without further action from the General Assembly” per the sports betting law. The limit that can be borrowed for sports betting initial costs is $14 million.
Carpenter was questioned by Commissioner Cari Boyce about the steep increase in price between the first agreement and the amendment. She also wanted to know if there was an expectation early on that GLI would submit an amendment at an additional cost.
“What I’m trying to get at is, would they still have been the most competitive bidder because this is a pretty big jump in the contract cost,” Boyce said.
According to NC Lottery’s Chief Legal Officer William Traurig, there were only two bidders for the initial contract: GLI and former Virginia Lottery Executive Director Kevin Hall.
Both were hired and the commission utilized Hall’s expertise in “helping us get up to the point before passage of sports betting.” GLI’s services “were more on the implementation side” so the commission waited until the passage of the law and then contracted them for “base services so that we could get started and not slow down the process of implementing sports betting. And then we decided we would come back for the amendment.”
Ironing out rule-making policy and procedures
The last item on the agenda regarding sports betting was an information session on how the commission will set rules to comply with the sports betting law, meet policy goals and protect players.
The commission’s goal is to have a transparent and “deliberative rule-making process” while giving the public the chance to provide feedback. Public input will be accepted in the form of written submissions and public hearings. Citizens will be able to register to speak at public hearings to provide their opinions on the proposed rules.
Next sports betting meeting not yet set
There was no indication during the session of when the next publicly-available sports betting meeting would take place. However, given today’s proceedings, the commission will at the very least announce the contractor selected to manage the sports betting licensing process next week according to the timeline above. A more detailed timeframe for rolling out sports betting was not addressed.