North Carolina has never been viewed as what could be considered a progressive state, but that could be changing. Only last month, after tense negotiations, did the state introduce sports gambling, but sportsbooks are limited to two tribal casinos operated by the Eastern Bank of Cherokee Indians. This severely handicaps the state’s possible revenue options, and two state senators are hoping to garner support for the rapid expansion of sports gambling in the state. A new bill was filed this week that would open the doors for up to 12 sportsbook licenses to be issued.
NC Senate Bill 688 to the Rescue
Senate Bill 688 (SB 688) was filed by Senators Jim Perry and Paul Lowe. They want to legalize sports gambling in order to capture new revenue streams that can be used for North Carolina’s education programs, including for the construction of new schools. If approved, SB 688 would allow wagers to be placed on virtually all sports and sports events from the college level or higher and would give the NC Education Lottery Commission (NCELC) the authority to determine what sports activity is appropriate for gambling.
The NCELC now serves as the wallet for North Carolina’s education programs and all of its profits are earmarked for that purpose. An 8% tax on the monthly adjusted gross revenue of the sportsbooks would increase the money destined for education, with half of the revenue being pulled to be used for job growth and economic development in certain economically distressed areas of the state, known as Tier I areas. In speaking with The News & Observer yesterday, Perry asserted, “I have two Tier 1 counties and while I’m thankful for the money available through the lottery — they’ll let you forgo five years of your lottery funds to get some advance money, so to speak, to help with your schools — but that’s still not enough.”
Sports Gambling Produces Win-Win
In more than a few instances, certain legislative figures across the US have tried to argue that legalizing sports gambling isn’t profitable because the regulatory responsibilities are extremely costly. According to Perry and Lowe, and also based on data available on sports gambling activity in the US, North Carolina could see up to $50 million a year in sports gambling. If regulators have to spend even as much as 4% of that each year to manage the market, they’re definitely doing something wrong.
SB 688 suggests that gambling operators interested in owning a piece of the action pay a licensing fee of $500,000. There would also be a renewal fee of $100,000 for interactive sports gambling licenses and $10,000 for the renewal of a service provider license. With the bill recommending that the NCELC be allowed to issue between 10-12 licenses, the initial revenue generation from just the launch of sports gambling in the state could reach as much as $6 million, which would give the state’s public school system a significant boost.
NC has already made several attempts to introduce sports gambling, but it wasn’t until Senate Bill 154 gave the Cherokee tribe in 2019 the right to launch sportsbooks before any real progress had been made. Given the fact that sports gambling is already widely active across the state, although through offshore or illegal sportsbooks, NC has a chance to capture a guaranteed revenue stream by legalizing sports gambling.