Another major domino could fall for the U.S. sports betting industry with the state of North Carolina moving forward with legislation to allow sports betting from commercial operators. On Thursday, the state Senate voted 26-19 to advance a measure to the House. Five lawmakers didn’t vote.
North Carolina has retail sports betting at a pair of tribal casinos on the western side of the state. Senate Bill 688 would allow gambling statewide via mobile devices. Up to 12 five-year licenses would be awarded under the bill, and no fewer than 10 would be awarded.
Neighboring Tennessee has online sportsbooks, many of which would seek entry into North Carolina as well. The Volunteer State launched its sports betting industry in late 2020. As in Tennessee, the state lottery would regulate sports betting within the borders of North Carolina.
The ongoing North Carolina session ends in mid-September, with the legislation potentially carrying over into 2022.
Tax rebate for sports betting industry?
North Carolina anticipates generating between $8 million and $24 million in additional revenue annually from sports betting, as operators would be taxed at an 8% rate on adjusted revenue. Sportsbooks could write off “the cash value of any bonuses or promotional credits provided to registered players that are then returned to an interactive sports wagering operator in the form of a deposit or wager.”
The market could be a lucrative one for sportsbooks, as North Carolina is the ninth most populous state, with around 10.4 million residents. It also experienced relatively high population growth of 9.5% from 2010 to 2020, according to U.S. Census data.
Half of the state’s 8% cut of adjusted revenue would be go into a newly created North Carolina Major Events, Games, and Attractions Fund. That would be used to promote events, including sporting competitions, taking place in the state. Those efforts could help bring new sports betting customers into North Carolina, which would boost the bottom line of sportsbooks.
The other half would go into the state general fund.
There is a stipulation that any event being promoted with state funds must not be held more often than annually. In other words, taxes here couldn’t be used to directly promote travel to the state for NFL games, which would problematically benefit the industry subjected to the tax under the bill, as sports teams across the country have formed commercial partnerships with sportsbooks.
The state is divided on sports betting. According to a recent poll from Eastern Carolina University, among 2020 voters just 47% approve and 53% disapprove of legalization. Among non-voters, support is significantly higher, with 66% approving and only 34% disapproving.
At public hearings on the bill, opponents have mentioned the personal and family catastrophes that can result from gambling addiction. SB 688 would earmark $1 million on an annual basis to try to help those with a new or worsening addiction.
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