The NC Lottery Commission’s Sports Betting Committee revealed a list of proposed changes to the second round of draft sports wagering and parimutuel rules Tuesday. The changes come from staff recommendations and over 150 public comments on Rulemaking Package Two.
The NCLC is on an expedited schedule to establish rules and approved regulations that can go into effect as early as Jan. 8 ahead of a full launch of North Carolina online sports betting sometime after the 2024 Super Bowl on Feb. 11.
Tuesday’s meeting reviewed rules on naming rights for sports venues, using reloadable cards to fund bets, affiliate marketing deals and some minor stylistic changes.
Naming rights for North Carolina pro sports venues
The NCLC staff recommended that the proposed rule on naming rights for pro sports facilities be deleted. Currently, the rules include the following restrictions on a sports betting company’s ability to buy naming rights to a sports venue or racetrack.
Rule 1H-002 Facility Naming Rights.
(a) No Operator shall contract for or purchase the right to name a Sports Facility or racetrack, or any physical locations within the Sports Facility or racetrack, including but not limited to seating locations, luxury boxes, parking lots, concourses, track, playing field, court, golf holes, locker rooms, benches, concession stands, and the like.
Caesars Entertainment, which already has a branding presence in NC via the state’s two Cherokee-owned Harrah’s casinos, acquired the exclusive naming rights to the iconic Louisiana Superdome (formerly the Mercedes-Benz Superdome) in July 2021. The deal is for 20 years and worth $138 million. Caesars owns the Harrah’s brand, and the NC casinos participate in the Caesars Rewards program.
Using prepaid cards for NC sports betting
During the meeting, the NCLC’s Deputy General Counsel Eric Snider said that among the public comments received were requests that prepaid cards be approved as acceptable forms of payment for wagers.
“We received some comments requesting that the Commission accept as payment for wagers prepaid gift cards. And we looked at some of the submissions and looked at some approaches that our sister states are utilizing in sports wagering context and have borrowed, and modified a regulatory provision from Indiana,” Snider said.
He continued:
“We would propose that the Commission accept gift cards as a funding source for wagers or for account deposits. And again, those would be moving through accounts and verifiable and nontransferable to the patron coming forward with the card.”
Many online sportsbooks accept prepaid gift cards for payment including the top players in the market: DraftKings North Carolina, and BetMGM North Carolina.
Affiliate marketing compensation limits
In some states, affiliate marketing websites that have partnerships with sports betting companies receive commissions when site visitors click through links or advertisements and create an account with the operators. Types of affiliate compensation include cost-per-acquisition (CPA) and revenue sharing.
The NCLC’s staff recommended that affiliates be prohibited from entering revenue-sharing agreements with operators.
“Operators cannot compensate marketing affiliates based on net sports wagering revenue earned from players the marketer drives to the wagering platform.”
However, CPAs will be legal so affiliates can be compensated when a new player clicks through a link and creates an account with a sports book.
Other recommendations for North Carolina sports betting rules
Many of the committee’s recommendations included grammar and style edits. The committee also made recommendations to clarify the wording for the following items.
– Rules for denying the transfer of a license.
– Confidentiality of trade secrets and written designation agreements of license applications.
– Descriptions of the internal controls for technical tools that analyze and use player data.
– Allowing season-long promotions, subject to certain limitations.
– Privacy requests to operators from players including allowing players to receive written account statements via U.S. mail or email.
– Providing ways for players to obtain information “information about third-party entities with whom operators share data.”
– Guidelines on static branding such as logos.
– Refine language on disciplinary actions for licensees who do not implement corrective actions on time.
Next Steps
The full NC Lottery Commission is set to meet on Dec. 13 to review and approve the recommendations of the Sports Betting Committee. Rulemaking Package Two is available on the commission’s gaming website, ncgaming.gov.
Operators, service providers and suppliers have until Dec. 27 to submit a license application to the NCLC. So far, 11 operators have requested online sports betting applications.
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