.svg)
Body
Three years after neighboring Virginia approved sports betting, iLottery and casinos in quick succession, North Carolina lawmakers are considering following suit and even upping the ante, with video lottery terminals (VLTs) and internet gaming also in play.
North Carolina enacted a new law in June to regulate mobile sports betting, with the state lottery commission moving last week to also authorize digital instant lottery games launching as soon as November.
The two initiatives mark a significant expansion for a state whose gambling market is currently limited to traditional lottery products and a trio of tribal casino-resorts on Native American lands.
Three years ago, Virginia similarly abandoned its long-standing status as terra incognita for gambling expansion by passing a series of bills allowing sports betting, iLottery and up to five land-based casinos.
Virginia’s gambling market had similarly been restricted to traditional lottery games and racing operations before the state’s transformative 2020 legislative session.
With sports betting and iLottery now on the books, North Carolina lawmakers are still evaluating a draft proposal — which may be part of the state’s new budget law or approved alongside it — to authorize four casinos in different regions of the state.
The Tar Heel State could even go a step or two further than Virginia, however.
The executive budget proposal of Governor Roy Cooper, a Democrat, included provisions to regulate VLTs in licensed bars and restaurants to replace a substantial market of unregulated gaming devices with a legal alternative operating under the purview of the North Carolina Lottery Commission.
If approved, VLTs in North Carolina would undoubtedly offer one of the most significant expansion opportunities for U.S. slot-machine manufacturers in the past decade.
Virginia did not bite on VLTs or distributed gaming in 2020, although it should be noted that then-Governor Ralph Northam did move to establish a temporary registration system for supposedly skill-game machines in convenience stores and gas stations that lawmakers have since allowed to expire in favor of prohibiting them.
Meanwhile, major sports-betting operators such as FanDuel, DraftKings and BetMGM are also advocating for iGaming to be added to the mix in North Carolina.
The argument is that if North Carolina is going to go big on gambling expansion, it makes little sense to ignore online casino games that have already become a key revenue-driver in states such as New Jersey, Michigan and Pennsylvania.
Internet gaming will be considered as part of the broader gambling conversation, according to North Carolina Senate President Phil Berger, although both Berger and fellow Republican House Speaker Tim Moore appear to be more skeptical of iGaming relative to VLTs and land-based casino-resorts.
“One of the things that we have to be cognizant of … is the idea of some sort of market saturation and whether or not the more that you have on the phone that looks like a slot machine and acts like a slot machine, do you diminish the expectation that you have as far as the revenue is concerned from other things we’re considering,” Berger told local news publication WRAL last week.
It is still far from certain that casinos or VLTs will be approved as North Carolina lawmakers prepare to wrap up their 2023 legislative session after adopting a new budget in the coming weeks.
Major casino companies are understood to be concerned about the shape of draft legislation that would grant one operator a license to develop three of North Carolina’s four casino-resorts in return for a $1.5bn minimum capital commitment. The fourth casino in the southeastern region of the state would be reserved for the Lumbee Nation Indian tribe.
Although such a licensing structure has some precedent in Canada and other international markets, it would be a unique approach in the U.S. where states have typically issued licenses for different casino zones independently.
The Catawba Indian nation, which operates one of North Carolina’s existing tribal casinos near Charlotte, has also publicly opposed commercial casinos and VLTs and tribal representatives were in Charlotte last week lobbying Governor Cooper, House Speaker Moore and other lawmakers on the issue, according to tribal chief Brian Harris.
Whether or not North Carolina moves forward with casino gaming could be an indicator as to whether there will be a wider trend of long-term holdouts on gambling expansion ultimately choosing to go all-in rather than take a more gradual, step-by-step approach.
In recent years, commercial gaming interests have also lobbied in support of both sports betting and casino expansion concurrently in the major markets of Georgia and Texas.
In Alabama, Republican Governor Kay Ivey has similarly advocated for a multifaceted approach to gambling regulation to include a state lottery, commercial and tribal casino gaming, and mobile sports wagering.
Legislation along those lines cleared the Alabama Senate in 2021 before dying in the House, but lawmakers have pledged to revisit the issue next year.
