With the clock ticking, the North Carolina Lottery Commission now faces the nitty-gritty task of rulemaking.
The second batch of sports betting rules includes a system to permit and outlaw certain wagers and wagerable sporting events on a case-by-case basis.
The NCLC’s second round of rulemaking for North Carolina online sports betting and pari-mutuel wagering was released on Nov. 7.
The effect on college sports betting
Under the NCLC’s proposed rules, betting companies cannot add new types of bets without first going through an NCLC vetting process.
The proposed restrictions could influence if the NCLC excludes certain controversial wagering types such as prop bets on NCAA games. Some argue that college prop betting could promote match-fixing and corruption related to sports betting in the college sphere. The NCAA has a strong stance against prop betting and other activities that could illegally influence the outcome of a contest.
“Sports competition,” reads the NCAA’s sports wagering news release, “should be appreciated for the inherent benefits related to participation of student-athletes, coaches and institutions in fair contests, not the amount of money wagered on the outcome of the competition.”
College prop team bets are legal in over 20 states. Several states have restricted that type of wagering, prohibiting betting on in-state college teams.
Were the NCAA to petition for the outlawing of college prop bets, Rule 2C-003 explains the process as follows:
“A Sports Governing Body or equivalent may submit to the Director in writing a request to restrict, limit, or exclude a certain type, form, or category of Sports Wagering with respect to Sporting Events of the body, if the Sports Governing Body or equivalent believes that the type, form, or category of Sports Wagering with respect to Sporting Events of the body may undermine the integrity or perceived integrity of the body or Sporting Events of the body.”
NCLC’s proposed vetting process of new wager types
In its second round of draft rules, the NCLC specifically addresses how a sports betting operator can introduce new types of wagering. The steps include petitioning the NCLC to offer a new type of wager or new category of sporting event. The operator must clarify if the new wager or sporting event is a variation of an existing bet or event. This includes esports events. Per Rule 2C-002:
The Sporting Event or Wager Type being requested shall meet the following criteria before the request may be approved:
(1) The outcome may be verified;
(2) The outcome may be generated by a reliable and independent process;
(3) The Sporting Event generating the outcome is conducted in a manner that ensures sufficient Integrity Monitoring controls exist so that the outcome may be trusted;
(4) The outcome is not likely to be affected by a Sports Wager placed; and
(5) The Sporting Event is conducted in conformity with applicable laws
The NCLC will approve or reject the petition within fourteen days. The NCLC can also request that the operator conduct a trial to test the viability of the new wagering type or event.
Suspending wager types and events
Even if an operator offers an approved type of bet or event, the NCLC could suspend those activities under the proposed rules. If this happens, the Commission will require the operator to issue refunds to patrons who placed bets on the newly outlawed wager type of event.
“The Director may restrict, limit, or exclude Wagering on a Sporting Event or Wager Type if the Director determines that the restriction, limitation, or exclusion is required to ensure the integrity of the Operator.”
The Director refers to Mark Michalko, the executive director of the NC Lottery.
Next Steps toward NC online sports betting launch
The NCLC’s second round of sports betting and pari-mutuel wagering rules are subject to public comment through Nov. 27. Citizens can submit comments in person at a public hearing on Nov. 20 or via an online form.
With an expedited rulemaking process underway, the NCLC could have rules in place by the spring of 2024. The next round of rulemaking will likely begin in early December.