Story was updated at 2 p.m. EST
Online gaming companies could see the welcome addition of another state market, with North Carolina looking to move forward with online sports betting.
Senate Bill 688 was slated for a Wednesday hearing at 1 p.m. EST in the North Carolina Senate Finance Committee. The bill was introduced in early April, but hasn’t made much progress since. North Carolina has retail sports betting at a pair of tribal casinos, but policymakers are looking to expand into the mobile realm.
North Carolina is the ninth most populous state in the U.S., according to 2020 Census figures. It has more residents than Michigan, which is a major online gambling market. That said, Michigan also allows online casinos. North Carolina would not — at least not anytime soon. North Carolina’s population grew 9.5% between 2010 and 2020, better than the national average of 7.1%.
Online gaming stocks could tick higher with legalization by North Carolina.
Legislation expected to take small step forward
According to a report from wral.com, the bill is expected to clear committee, but its ultimate chances of becoming law can’t yet be determined. The ongoing legislative session concludes in mid-September.
Under the current bill, 10 to 12 online sportsbooks would make their way to the state. The bill would require a $500,000 licensing fee, which is relatively inexpensive for an operator. The license would be good for five years, and renewal would cost $100,000. (To put this all in perspective, there’s a $750,000 annual licensing fee in neighboring Tennessee.)
In its current form, the bill would tax adjusted gross revenue at 8%, a relatively low rate compared to some other states. (Tennessee charges 20%.) Furthermore, the bill would allow operators to exclude “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” when reporting adjusted gross revenue.
‘My mother doesn’t like this legislation’
Republican State Sen. Jim Perry briefly discussed the legislation at the speedy Wednesday hearing, where no vote was held. Perry said sports betting is a mixed bag for the state, but pointed out that it’s already happening.
“My mother doesn’t like this legislation,” Perry said of the social harm legalized gambling could cause. “I understand because of how she was raised.”
However, he added, “I refuse to accept it’s Armageddon,” referring to opponents who argue that no good can come from legal online sports betting.
The 8% tax rate is up for debate, according to Perry, who compared North Carolina to Pennsylvania in terms of the anticipated tax haul.
“I don’t know where this tax rate ends up,” he said. “[The] $25-50 million range [in state tax revenue] is the best guess at this point. Social impacts are tough to estimate.”
Among the changes to the bill announced at the brief hearing was adding another level of licensure for businesses that provide sports betting-related services. Additionally, owners of sports facilities could potentially be allowed to have retail wagering of some kind within a half mile from a given venue.
All in all, based on Wednesday’s comments, the legislation is still very much a work in progress.
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