North Carolina Governor Roy Cooper signs online sports betting legislation

North Carolina Governor Roy Cooper on June 14 signed House Bill 347 into law, legalizing new forms of gambling in the state.

Bipartisan legislation will authorize and regulate online betting on professional, college and amateur sports and horse racing in North Carolina. The state’s first online bookmakers are expected to launch in the first half of 2024.

“This legislation will help North Carolina compete, ensure taxpayers get a share, create many good-paying jobs and foster strong economic opportunity,” Governor Roy Cooper said. “As we move forward, we should work to ensure that more of the revenue is used to invest in our public schools, teachers and students.”

Currently, North Carolina only has retail sports betting in tribal casinos. The new law makes the state the 28th in the nation with online sports betting, with eight other states having only retail betting.

The North Carolina bill comes at a time when sports betting has never been more popular in the US nationwide, Americans wagered a record $31.11 billion on sports in the first quarter of 2023. generating an all-time high of $2.79 billion in quarterly revenue (+70.1% year-on-year), according to data from the American Gaming Association. Compared to the first quarter of 2022, growth was largely driven by new market launches in Kansas, Massachusetts and Ohio. North Carolina will help continue the momentum.

According to a statewide analysis, North Carolina may be a relatively large market for the sports betting industry. The state analyzed information about sports betting performance in other states to estimate potential gross betting revenue (GWR extension) from online betting, accounting for differences in disposable personal income and adult population in each state.

The bill also authorizes sports venues and certain associated and neighboring properties to accept sports bets. Tax research used information on the estimated number of such structures, which increased their potential GWR extension of a small amount. States with both online and retail sports betting have seen over 90% of the handle come through the internet.

Fiscal Research assumed that total bets from online and in-person wagers would grow from approximately $3.9 billion in the first full year of operation to $6.6 billion in the third full year of operation. This value was adjusted in subsequent years to take into account expected income and population growth.

On average, sports betting operators are expected to pay around 91% of the total amount received as bets as winnings.

North Carolina to tax online sports betting at 18%.

Governor Cooper was joined by representatives from professional sports organizations, including the Charlotte Hornets, Carolina Panthers, Carolina Hurricanes, Charlotte Football Club, NASCAR and the PGA extension Tour. When Cooper signed the bill into law, several state lawmakers were also present and helped push the legislation forward.

House Bill 347 mandates the North Carolina State Lottery Commission to regulate sports betting and will be responsible for issuing licenses and collecting any license application fees. The licenses will be valid for five years and the types of licenses include licenses for interactive sports betting, licenses for service providers and licenses for sports betting providers.

The legislation will create two ways to place a sports bet: in person at a “public lodging place” or as a registered player via an interactive account.

The interactive sports betting operator would be responsible for ensuring the identity and age of any person attempting to place a bet. To place a bet, a person must be at least 21 years old.

Up to 12 online sports betting licensees would be allowed to accept bets on professional sports, college sports, e-sports, amateur sports or any other Commission-approved event.

The new law will send state tax revenues from online sports betting to the Department of Health and Human Services for gambling addiction treatment and education programs. In addition, tax revenues will go to boost North Carolina amateur sports, 13 public universities in the state, the “major events” fund to help bring sporting events and festivals to the state, the North Carolina Outdoor Heritage Advisory Council and the General State’s General Finance.