A piece of legislation aimed at exploring the expansion of gambling in North Carolina is now on Gov. Roy Cooper’s desk. The bill, SB 574, was delivered to Cooper Tuesday.
The legislation underwent significant changes during the tail end of the legislative process. An earlier nine-page version called for creating a North Carolina Gaming Commission, which would have studied the potential for sports betting outside of the tribal casinos in the western side of the state. The Cherokee casinos were greenlit for retail sports betting under a separate piece of legislation that Cooper signed in July. The casinos haven’t opened their respective books yet.
The barely two-page SB 574 sent to Cooper still calls for a study of sports betting, presumably including statewide via online/mobile devices, but it no longer contains provisions for creating the Gaming Commission. Instead, the North Carolina State Lottery Commission will study the feasibility of sports betting. The potential new law, which is awaiting a signature from Cooper, would also look at possibly establishing the aforementioned Gaming Commission. The bill had widespread support in the legislature. The final vote was 44-1 in the Senate, and 97-12 in the House.
During the legislative process, some policymakers in the state were concerned that the earlier version of SB 574 would expand gambling on its own. Historically, North Carolina is a relatively unfriendly state to the gaming industry. It has no commercial casinos or racinos.
Following in Tennessee’s footsteps?
The North Carolina Lottery is online, so it’s possible that the Lottery could be the regulator for a statewide online/mobile betting industry. That’s the route that neighboring Tennessee decided to embark on with a bill signed into law this summer. Tennessee is also without any commercial casinos.
The Volunteer State is expected to begin online/mobile betting in January.
While Tennessee didn’t decide to delay sports betting with a study bill, North Carolina will look at the following with regard to regulating sports gambling:
- Effects of authorizing sports betting on existing tribal games and on lottery, if any
- The “positive and negative impacts” of authorizing sports betting
- Potential revenues and expenditures for the state if sports betting is authorized
- Appropriate regulation and oversight of sports betting, including potential licensing of operators
The study of expanding gambling will also contain an examination of whether any additional resources may be needed for assistance to problem or at-risk gamblers.
Timeline for the study
The Lottery must report its findings and recommendations, together with any proposed legislation, to the Joint Legislative Oversight Committee on the State Lottery by April 15, 2020.
The Lottery must contract with an independent third party to conduct the sports gambling research, using funds appropriated to the Lottery Commission.
The findings from the study are likely to be appealing to some — perhaps many — officials in North Carolina. According to a 2017 Oxford Economics nationwide study of sports betting markets, commissioned by the American Gaming Association, North Carolina would be a significantly above-average state in terms of sports gambling handle. The state could see about $7.2 billion in annual bets, assuming statewide mobile adoption and a 10% tax rate on operators.
The 50-state average for sports betting handle under the same market conditions is about $5.7 billion.