North Carolina Mobile Sports Betting Clears Key Senate Vote

June 1, 2023
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Mobile sports-betting legislation in North Carolina took a significant step toward becoming law on Wednesday by gaining initial approval in the state's Senate.

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Mobile sports-betting legislation in North Carolina took a significant step toward becoming law on Wednesday (May 31) by gaining initial approval in the state's Senate.

The Senate voted 38-11 to approve House Bill 347 on second reading on Wednesday afternoon. Another favorable Senate vote will still be required, potentially as early as Thursday morning, for the bill to clear the chamber, but the successful margin bodes very well for the bill’s chances.

If the bill does clear the Senate on Thursday, it will then return to the House for concurrence with the changes the Senate made throughout the committee process in recent weeks.

Whether the House will ultimately decide to concur was less than clear on Wednesday evening, after Republican House Speaker Tim Moore indicated to local media he may instead seek to combine mobile sports betting with other forms of gaming expansion, specifically video lottery terminals (VLTs) and casinos.

"Right now the plan is probably that we don't concur, but we're going to talk through it," Moore told WRAL News.

Senate leaders have said they would rather address VLTs, which are supported by the state's governor, and potential casino expansion independently of sports wagering.

As approved on Senate second reading, House Bill 347 would mandate the North Carolina State Lottery Commission to issue up to 12 mobile sports-betting licenses through a competitive application process.

Federally-recognized Indian gaming tribes in the state would also receive the same access to a license, and would not count toward the 12-license cap.

Under the Senate version, operators would pay an 18 percent tax rate on gross gaming revenue, whereas the House-passed bill featured a 14 percent tax rate. Both versions propose a $1m fee for a five-year license, with a $1m renewal fee.

The House bill permitted operators to deduct promotional play from taxable revenues, while the Senate bill removed that provision and would tax all gross gaming revenue.

In another point of difference, both the Senate and House versions of the bill would allow for major sports stadiums and arenas to become “places of public accommodation” where players can place wagers.

However, although the House bill would require players to use a registered interactive account to place wagers, the Senate bill would permit the places of public accommodation to accept cash wagers without an account.

Another meaningful difference is the addition of pari-mutuel wagering and live horseracing in North Carolina in the Senate version of the bill. The House bill prohibited pari-mutuel wagering.

An earlier version of the Senate bill also included provisions to allow historical horseracing machines, but that provision was removed during the committee process and was not included in the version of the bill passed by the full Senate.

Advance deposit wagering licenses for pari-mutuel wagering would also come with a $1m fee for a five year-license, as well as an annual fee of 1 percent of the total pari-mutuel wagering handle.

The amended Senate bill also specifically outlines cryptocurrencies as a permitted funding option for interactive sports wagering accounts, which has been a rarity in the U.S. regulated online gaming space to date.

Discussion on the Senate floor on Wednesday came entirely from opponents of the bill, who rejected arguments that converting players to the regulated market and the revenue gained from legal sports wagering was worth the additional social concerns that gambling expansion could present.

“It’s just common sense that gambling is going to increase when it's more readily available to people,” said Democratic Senator Lisa Grafstein. “Right now, it's only those who were really specifically motivated and have the technological savvy who are able to able to bet illegally.”

“And once ads are everywhere, and there's an easy way for even the most technologically unsophisticated among us, such as myself, to bet on our phones, those numbers are just going to skyrocket,” she added.

“So the argument that we're regulating what's already happening is really not accurate, I would say, and we would be creating more gambling.”

Additional reporting by James Kilsby.

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