One week after the launch of online sports betting in North Carolina, the NC Lottery Commission is back at the drawing board to solidify rules and regulations.
The NCLC’s Sports Betting Committee met on Wednesday to begin the third round of rulemaking for sports betting. The backdrop of the meeting was a smooth start to NC online sports betting amid the frenzy of postseason college basketball with several NC teams participating in March Madness.
“Sports betting has just begun, and we think that it has gotten off on a very positive note,” said Sterl Carpenter, the NCLC’s deputy director of sports betting. “We will have more information to report to this committee and the commission on a regular basis as we move forward.”
Improving and amending rules
Ahead of the opening day for legal sports betting on March 11, the NCLC spent several months drafting, reviewing and approving rules.
The first two rounds of rulemaking focused primarily on online and retail sports betting and included a public comment period. Wednesday’s “Notice of Proposed Rulemaking” includes clarifications of terms and definitions and the introduction of two new rules. The clarifications made include:
– Eliminated use of “Wagering Lounge” for “Wagering Facility.”
– Returned/Insufficient payments basis for discipline or denial.
– International criminal history record checks triggered by residency.
– Failure to comply with North Carolina Department Of Revenue requirements basis for discipline or denial.
– Addressed conflict of interest for hearing officers in our disciplinary process.
– Financial Institutions used to hold reserves must be authorized to do business in NC.
– Clarified treatment of seized winnings from voluntarily excluded players.
– Facility rule additions for equipment list, key inventory, surveillance system malfunction, and security retention and cooperation requirements.
New rules focus on compliance
Carpenter celebrated the relatively smooth sailing of online sports betting thus far. It is inevitable though that at some point the NCLC will have to investigate operator infractions. The new rules address compliance issues.
“While we continue to process applications, we are turning our focus here to monitoring and compliance items,” said Carpenter ahead of introducing the proposed rules.
The first proposed rule sets a deadline for operators to respond after they receive a formal letter of inquiry from the NCLC. Its purpose is to help the agency obtain answers to specific queries during investigations of operators and to request documents. The rule would also enable the agency to set deadlines for those document requests.
The second rule outlines the requirements for inspections of retail betting venues before they open and anytime after they begin accepting wagers.
With just a handful of changes and only two new rules introduced, NCLC Chair Ripley Rand applauded the groundwork of the sports betting committee.
“With this rulemaking we are only making limited changes because we appear to have gotten it right the first time.”
Submitting public comments
The public comment process mirrors that of previous rulemaking periods. Citizens can submit remarks online via a web form or email. They can also request to speak during a public comment session.
The public comment session is set for April 9 at 9 a.m. at the agency’s headquarters: 2728 Capital Blvd., Suite 144, Raleigh, NC 27604. Participants must submit their request to speak at least a day before the session.
Handling rules violations
How quickly the NCLC reacts to infractions remains to be seen.
In Massachusetts, a state that has some of the strictest laws for regulating gambling, the state’s gaming agency wasted no time in scheduling a hearing to grill operators on illegal bets that took place during the first week of retail sports betting.
Earlier that year in Ohio, the state’s casino control commission put three operators in hot water less than a week after sports betting became legal due to violating rules and state law on advertising. Both states assessed hefty fines and issued stern warnings.
Carpenter arrived in North Carolina from Massachusetts where he spent nearly nine years with the Massachusetts Gaming Commission. He helped the New England State craft its regulatory structure for sports betting during that time.
Perhaps NC will follow the lead of Massachusetts and Ohio to be aggressive in putting operators on the defense when they violate regulations and state laws.
In the meantime, it’s smooth sailing for North Carolina. Record-breaking betting handle is expected for March Madness according to the American Gaming Association. The organization estimates that adults U.S. will legally wager $2.72 billion on the NCAA tournament this year.
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