Raleigh, North Carolina — The effort to legalize online sports betting in North Carolina, publicly dormant during the current legislative session, could start moving quickly this week.
The House Judiciary Committee 1 will hear two sports betting bills on Tuesday. The bills work in tandem to legalize sports betting statewide online and on mobile devices. Senate Bill 688 passed a divided Senate last year. The text of Senate Bill 38, an unrelated bill that passed the Senate last year, will be deleted and replaced with a sports betting bill on Tuesday.
WRAL News received a copy of the new bill late Monday evening.
SB 38 increases the fees and tax rates proposed in SB 688 to be paid by sports betting operators. Under the new proposal, operators would pay a preferred 14% tax on gross betting revenue minus paid-out winnings plus promotional/bonus credits and federal excise tax. The deduction for promotions and credits would be phased out over five years. The original bill proposed a tax rate of 8% and did not cancel the deduction for promotional or bonus credits.
If the bills are passed and signed into law, legalized online sports betting could begin no earlier than January 1, 2023. The date given in the bill is later than previous estimates.
Legislation allows betting on professional, collegiate, electronic and amateur sports. Taking bets on youth sports, defined as events in which the majority of competitors are under the age of 18 or are competing on behalf of preschool, elementary, middle or high schools, is not permitted by law.
Representative Ted Davis, chairman of the House Judiciary Committee, announced in a letter to House members last week that he was postponing the hearing because he had tested positive for COVID-19. But on Monday, the hearing was scheduled and announced publicly. The notification did not announce who would preside over the hearing, which is expected to begin after a 4 p.m. session ends in the House.
Supporters of the legislation have said they have the votes to pass the bills this year, although there is criticism of legalized sports betting in Republican and Democratic caucuses. If the House Judiciary Committee approves the bills, they will go to the House Finance Committee and then to the House Rules Committee before a floor vote, which could take place as early as this week.
The Senate would also have to agree with the changes to SB 38, but this bill would not have to go through Senate committees. Lawmakers have targeted late June to wrap up the current session. They will only see each other again in January, except for a special session. Governor Roy Cooper has said he supports legalizing sports betting and will sign the legislation.
The senses. Jim Perry, R-Lenoir, and Paul Lowe, D-Forsyth, are the sponsors of the Senate bills. Reps. Jason Saine, R-Lincoln, Jon Hardister, R-Guiflord, and Zack Hawkins, D-Durham, are the sponsors of complementary legislation in the House.
The Charlotte Hornets, Carolina Hurricanes and Carolina Panthers, as well as the Charlotte Motorspeedway, support the legislation. The state’s top athletic colleges have remained silent on the bill.
Sports betting is currently legal in North Carolina, but only at a physical casino. Two Cherokee casinos in the far west of the state currently accept sports betting. The Eastern Band of Cherokee Indians and the Catawba can apply for licenses online, but these would not count towards the total number of operators in the state.
Over 20 states allow online sports betting, including Virginia, Tennessee, and many East Coast states. Under the proposed law in North Carolina, at least 10 and up to 12 online operators would be allowed to take bets from adults located within state borders. Initial projections indicated the state could collect between $8 million and $24 million a year in tax revenue, but those numbers would increase if lawmakers enact higher tax rates, as proposed in the second bill.
After spending by the Department of Revenue and the North Carolina State Lottery Commission, the first million dollars in tax collected would go to the Department of Health and Human Services for education and treatment programs for gambling addiction.
After that, revenues are split 50-50 between a new North Carolina Major Events, Games, and Attractions Fund and the state’s general fund. The major events fund would be used to bring major sporting events to the state. Local entities can apply for a grant from the fund. To be eligible for a grant, the event must take place at a NASCAR track, a golf course with a professional event that attracts more than 50,000 live spectators, or the home of a professional sports team in MLB, MLS, NBA , NFL or NHL.
A US Supreme Court ruling in 2018 opened the door for the majority of states to allow sports betting. In Virginia this year, more than $400 million per month is wagered through sports betting operators. In New York, operators took about $7.5 billion in bets in the first five months of the year.