North Carolina Targets Bonus Abuse in Sports Betting Regulations

North Carolina sports betting will launch in 2024, possibly in January. Once it does, the market will benefit from the lessons learned in other jurisdictions. Regulations will specifically strive to combat bonus abuse.

What is bonus abuse? It’s when consumers fraudulently create multiple accounts with a sports betting app to secure promotional bonuses. Such activity violates NC Sportsbooks’ terms of service. North Carolina sports betting law also prohibits this.

Why limit bonus abuse?

Why does NC’s sports betting law limit bonus abuse by fraudulent sports bettors? Because it hampers the ability of sportsbooks to use their marketing dollars to acquire customers. It also can lead to fraudulent behavior and efforts to impact the odds of sporting events negatively.

Luckily for North Carolina, starting ‘a little late’ with its online sports betting market is advantageous. That’s because other states that legalized sports betting months and years ago have figured out what not to do. In addition, the European market, much more mature than the mobile sports betting industry in the United States, has taken measures to curb bonus abuse.

The state’s regulatory efforts, including measures to limit ‘bonus abuse’, suggest that sports betting in North Carolina will likely achieve tremendous success.

About sportsbook bonus abuse in North Carolina

Abuse of bonuses has been an issue in other states, but individuals can take steps to limit the impact of such prohibited practices.

What does the NC sports betting law say about tax deductions for promo offers?

Unlike many states, North Carolina will not permit sports betting licensed operators to deduct promo offers from their taxable income. That means if ESPN Bet North Carolina sportsbook offers a promo for $150 in bonuses, for example, that expense cannot be deducted from its income sheet.

In House Bill 347, 18C-912, section e, the regulations state:

“The registered player has provided any false or misleading information in connection with the opening of the account, or has engaged in collusion, cheating, or other unlawful conduct.”

What will that mean for NC sports betting? It may lead to fewer bonuses or smaller bonuses for sports bettors in North Carolina. We’ll know something about that once we learn the launch date for NC sports betting. Sportsbooks typically begin advertising promo offers in the weeks before the launch date.

North Carolina law states that the launch of sports betting must be between Jan. 8 and June 14, 2024.

Restrictions on creating multiple accounts

The NC state legislature included language in its sports betting law that addresses bonus abuse, or the creation of multiple betting accounts by the same person.

The most attractive bonus to bonus abusers is the free bet. That’s when the sportsbook hands out a betting credit simply for registering an account. While those types of bonuses are not as prevalent as they were a few years ago, we do see them often in a new market. North Carolina sports bettors are a hot commodity for the sportsbooks, and we can expect BetMGM, Caesars, DraftKings, FanDuel, and other NC betting apps to offer something of value to new users in the Tar Heel State.

How are bettors taking advantage of bonus offers abroad?

A sharp bettor (a bettor who uses a betting strategy to maximize his or her outcome) will create many accounts with a sportsbook offering a nice bonus, then use those bonuses to bet on both sides of a game, or to lay lots of money on an underdog.

Many sharp bettors feel the best strategy for using promo offers or bonuses is to bet heavily on the underdog. If there’s enough bonus abuse, consumers can even impact the odds of a game by betting large amounts on the underdog. Then, they can get more bonuses and wager on the favorite.

Sportsbooks are using AI and other technologies to find customers abusing their bonuses. These efforts will only increase.

How might NC avoid the threat of this kind of abuse?

Limiting or entirely preventing bonus abuse is not completely the regulator’s responsibility. Sportsbooks are taking steps to police the activity. Some states are offering fewer free bets and pre-bet offers. Players must make bets and typically those bets must be lost to get bonus betting credits.

About the Author

Dan Holmes

Dan Holmes writes about sports betting, sports media, and sports betting legislative matters. He's the author of three books, and previously reported for Major League Baseball, as well as the National Baseball Hall of Fame and Museum.