North Carolina House Committee Advances Sports-Betting Bills

June 22, 2022
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A North Carolina House committee sent forward two bills that would legalize mobile sports betting in the state, a key step before the state legislative session’s scheduled end date next week.

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A North Carolina House committee sent forward two bills that would legalize mobile sports betting in the state, a key step before the state legislative session’s scheduled end date next week.

By 6-3 votes on both bills, the House Judiciary 1 Committee approved Senate Bill 688, which the Senate passed last August, and an amended version of Senate Bill 38, which includes several modifications to the complementary bill, including setting higher tax rates and licensing fees.

Should both bills pass in their current form, the model would call for between ten and 12 mobile sports-betting licenses to be issued by the North Carolina Lottery Commission subject to a $1m application fee, a $1m license fee, and $1m renewals after five years. Additional licenses would be available to North Carolina's Eastern Band of Cherokee Indians and Catawba Nation Indian tribes.

The bill also allows account-based betting via kiosks and mobile devices in qualified “places of public accommodation,” which include major sports stadiums, racetracks that host NASCAR events, and golf courses that host events with more than 50,000 live spectators expected to attend.

The key change in Senate Bill 38 compared with the earlier Senate bill is increasing the proposed tax rate from 8 percent to 14 percent and placing a sunset clause on the ability of operators to deduct promotional play from their taxable revenues.

The earlier bill had no caps and no sunset, whereas the new proposal includes uncapped promotional play through the end of 2024, followed by 2.5 percent of handle in 2025, 2.25 percent in 2026, 2 percent in 2027, and no deductions from 2028 onward.

The quirky process of moving the amendments to S. 688 in a separate bill rather than amending the bill the Senate passed last summer confused some members of the committee.

“We had, as you understand, a ton of people involved in this, and it was slow moving and a lot of conversations, but we did exchange some commitments with them in advance,” explained Senator Jim Perry, the bill’s sponsor.

“There were some changes that were requested by members in the House, there were some in the Senate that thought of things afterwards, and we had conversations with representatives from the governor's office on how we would go about this process.”

“In our commitments, we did say, okay, we'll pass [Senate Bill] 688 as is and we'll work through the process, will not make any changes to honor the agreements that were done in advance and then the idea came up later about running the [separate bill] that would contain these changes and allows more time,” the Republican senator said.

“We had no idea they'd be in committee together today, but we did exchange commitments and we’ve kept our word every step of the way.”

During the committee meeting, several additional amendments were made to the second bill, including increasing a proposed allocation for gambling addiction education and treatment from $1m to $2m, and removing “amateur sports” from the acceptable list of events to bet on.

That definition would include Olympic competition, but would not include collegiate sports, which is a separate item.

Republican Representative Jason Saine, who was acting as committee chair and has been one of the top proponents in the House on sports wagering, did not permit any amendments to the earlier bill because of the aforementioned “commitments” by Perry.

Representative Pricey Harrison, a Democrat, said that if issuing amendments was permitted, she would have proposed removing collegiate sports from the bill, as well as banning credit card deposits.

“I think every single person in this room … knows how fraught it can be to allow gambling with your credit card,” Harrison said. “I’m sorry I was not allowed to run that amendment; I think it would have passed.”

The bills will now advance to the House Finance Committee and House Rules Committee, where they could be heard as early as Wednesday (June 22).

The North Carolina legislative session ends June 30. By then, Senate Bill 688 needs to be approved by the full House, assuming it continues without amendments, and Senate Bill 38 will need to be approved by both chambers of the legislature.

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