North Carolina Sports-Betting Rules Take Aim At Fantasy Pick'em Games

October 18, 2023
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North Carolina regulators have released their first set of proposed rules governing mobile sports betting, which include an attempt to limit the “pick’em” style fantasy games that have been under fire in recent months.
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North Carolina regulators have released their first set of proposed rules governing mobile sports betting, which include an attempt to limit the “pick’em” style fantasy games that have been under fire in recent months.

The North Carolina Lottery Commission’s Sports Betting Committee met for the first time Tuesday (October 17) and in just under 30 minutes approved a notice of proposed rulemaking to release the first section of its draft regulations to govern mobile sports wagering.

“On this maiden voyage for rules, we’re trying out a process for the first time and working to put in place foundational rules,” said Sterl Carpenter, deputy executive director for gaming compliance and sports betting for the North Carolina Lottery.

Carpenter said the lottery anticipates releasing a second rulemaking package next month, and that it remains on track to meet the statutory deadline of June 2024 to launch mobile betting in the state.

Many of the rules are general and likely uncontroversial provisions, but at least one rule seems set to generate some comments from prospective operators.

Included in the definitions section of the rules is a definition for “fantasy contests” that tracks similarly to language that has recently been used to prohibit popular pick’em-style fantasy contests in several states, including New York and Michigan.

The proposed rule says that fantasy contests permitted in North Carolina by virtue of not being a form of unregulated sports betting do not include any contests that are “based on proposition wagering” or “have the effect of mimicking proposition wagering or other forms of sports wagering.”

It also says fantasy contests do not include those where a player chooses “whether individuals or a single real-world team will surpass an identified statistical achievement, such as points scored.”

Finally, the draft rule says fantasy contests do not include those where an individual player does not compete against at least any other individual fantasy player, taking aim at house-banked contests.

The debate around the proposed restriction in North Carolina could center around the fact that, unlike in New York and Michigan, where the sports-betting regulator is also tasked with regulating fantasy sports, the North Carolina Lottery does not have any direct regulatory authority in the area.

North Carolina is one of around two-dozen remaining states in the U.S. where daily fantasy sports are neither explicitly permitted nor prohibited by state law, and therefore they remain unregulated.

Additionally, the state’s enabling legislation for mobile sports betting, House Bill 347, specifically states that the law that granted the lottery authority to regulate sports betting does not apply to fantasy sports.

“Nothing in this Article shall apply to fantasy or simulated games or contests in which one or more fantasy contest players compete and winning outcomes reflect the relative knowledge and skill of the fantasy contest players and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events,” states the bill, which became law in June.

Public comments on the proposed sports wagering rules can be submitted to the lottery by November 1. A public hearing will also be held at the lottery’s headquarters in Raleigh on October 27.

The rules have a proposed effective date of January 8, 2024.

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