North Carolina’s online sports betting bill, House Bill 347, was amended to allow pari-mutuel horse race wagering.
The amendment was added in the Senate Commerce and Insurance Committee to include provisions for pari-mutuel wagering and advance deposit (online) wagering on horse racing.
Gov. Roy Cooper has no qualms about ushering in the bill. Already in 2022, he reiterated his support of sports betting in North Carolina, saying “It’s time for us to step and do it.”
Horse racing a significant addition to the bill
The Commerce Committee passed a committee substitute to HB 347, which would “authorize, regulate, and tax sports wagering’ in North Carolina, including pari-mutuel betting on horse races.”
Pari-mutuel wagering works via a pooling system whereby all bettors “pool” their money, and the winners share the pooled money minus the house take.
The same committee removed historical horse racing, which involves betting through a terminal on anonymized replays of past horse races. HHR considerations were removed because the machines used to place the bets too closely resemble and operate like slot machines, which are illegal in the state outside of three tribal venues.
An estimate of the financial impact of the proposed legislation indicates total sports wagering tax and fee revenue (including pari-mutuel wagering) for the fiscal year 2023-24 at $22.1 million, growing to $100.6 million by fiscal year 2027-28.
Licensing for advanced deposit wagering
Another big change in HB 347 is the establishment of licensing requirements for advance deposit wagering (ADW).
This license is related to pari-mutuel wagering. Applicants would pay a $20,000 fee for an ADW license to allow bettors to place their bets online and in advance of an upcoming race.
Each ADW licensee pays an annual 1 % tax on the total pari-mutuel wagers placed by state residents.
The ADW license would allow for the pooling of wagers into one pot, with the race results determining the payout distribution.
Will the House View These Changes Favorably?
HB 347 would capitalize on illegal sports wagering that’s already taking place and regulate and tax the industry. The bill has been sent back to the House for concurrence after it passed the Senate on Thursday.
House Speaker Tim Moore has indicated the House will concur with the Senate’s changes, some of which got proposed in the House only to be shot down.
While the likelihood points toward concurrence, NCSharp contacted East Carolina University political science professor Dr. Peter L. Francia to get his take on how the Senate additions might fare in the House concurrence.
“I don’t see the amendment moving the needle much in terms of attracting more supporters or in terms of it losing supporters, “ Dr. Francia said. “The politics surrounding HB 347 effectively remains the same even after the amendment. Opponents of the bill will continue to make the same value-based arguments against it, while supporters of the bill will continue to make the same revenue-based arguments about how legalization will provide added tax money that can go towards public benefit.”
Dr. Francia said he believes the amendments served the purpose of the policy. In his estimation, the additions from the amendment will bring in more revenue than the original version of HB 347.
North Carolina’s race tracks: where are they?
There are no horse racetracks in North Carolina that allow for pari-mutuel betting.
The closest North Carolinians come is Pinehurst Harness Track in Pinehurst, which hosts harness races and is in the National Register of Historic Places.
North Carolina is also not home to any annual horse racing events.
Nearby, Virginia holds two steeplechase races yearly, the Virginia Gold Cup and International Gold Cup. However, Colonial Downs Racetrack in New Kent, Virginia, is the only racetrack where residents may bet online.
Pari-mutuel online horse wagering is legal in Tennessee at various ADW facilities, but there is nowhere to place bets in person.
North Carolina’s decision to add pari-mutuel wagering to HB 347 opens the state up to the prospect of online wagering and could, in the not-so-near future, lead to a rise in horse racing in the Tar Heel State.
About the Author
