North Carolina online sports betting is likely on its way to the Tar Heel State by early 2024 after the House approved all Senate changes to its bill on third reading this afternoon.

The bill, HB 347, will be sent to Gov. Roy Cooper (D) to be signed into law. Cooper has previously indicated he will sign the legislation into law. North Carolina will likely become the 28th state to legalize online sports betting.

The House approved the bill by a 69-45 vote, effectively ending a two year journey to legalize online sports betting in the state. It was the second House vote in as many days to finalize the changes made by the Senate to the legislation.

Opponents have their say on sports betting

Rep. Jason Saine (R-97), the original author of HB 347, opened up discussion on the bill and moved that the House concur with the bill’s changes on third reading.

“Today, I hope we have a very similar vote (as yesterday). I appreciate all the support,” he said before discussion was opened on the bill.

Even with the Senate changes, Rep. Pricey Harrison (D-61) said the bill remains “predatory” and will hurt North Carolina without receiving much in exchange. Harrison decried the decision to add horse racing back into the legislation after it had been specifically removed by the House of Representatives.

Additionally, the 18% sports betting tax rate could be unconstitutional, she said, as the state has a 7% cap on income tax.

Sports betting hurts families, Rep. Abe Jones (D-38) said, and is a harmful vice that will bring other harms into the state.

“It brings other cousins with it…it brings lone sharking, prostitution, and I put it right up there with cock fighting,” he said.

The integrity of North Carolina sports will be hurt with the approval of this legislation, Rep. Marcia Morey (D-30) told the floor. It’s a sad day for state athletes and for people who will undoubtedly become addicted to sports betting with this legalization.

“We are really harming the integrity of pure sports by putting gambling in. People will be more interested in the spread than they will be in the victory or the defeat,” Morey said.

Launch likely for early 2024

If signed into law by Governor Cooper, HB 347 will legalize 12 online sports betting licenses and brick-and-mortar sportsbooks at “places of public accommodation.” Brick-and-mortar sportsbooks will be allowed on the property of a stadium or arena, or within one-and-a-half miles of the facility. The sportsbooks will only accept cash bets.

These brick-and-mortar sportsbooks will be allowed at up to eight “places of public accommodation” in the state. Each of the licensed stadiums or arenas will be allowed to partner with up to one online sports betting operator.

The bill has been amended considerably since its House approval in March, namely by increasing the tax rate from 14% to 18%, allowing a brick-and-mortar betting element, adding pari-mutuel wagering on horse racing, and disallowing sports betting operators to deduct promotional bets from their gross revenues.

Sports betting will be launched in the state “no later than 12 months after the act becomes law.” This likely sets up a sports betting launch sometime in 2024.

The approved bill sets a sports betting tax rate at 18% of gross gaming revenue and allows for pari-mutuel wagering on horse racing. It allows allows bets on professional sports, college sports (including in-state schools), eSports, and the Olympic games.

At an 18% tax rate on gross gaming revenue, the state estimates $22.1 million in total sports wagering tax and fee revenue by FY 2023-2024, which increases to $100.6 million by FY 2027-28.

Healthy appetite for North Carolina sports betting

GeoComply, a company that provides geolocation services for online sports betting companies, identified over 1.5 million transactions from North Carolina residents attempting to access legal betting apps in outside markets between Jan. 1, 2023, through June 1, 2023. The company blocked all attempts to access the sports betting apps, but it shows the hunger North Carolina residents have for sports betting.

The attempts came from 155,000 unique sports betting accounts in the state, according to the company.

The interest in the Tar Heel State for sports betting is “undeniable,” John A. Pappas, SVP, Government and Public Affairs of GeoComply, said.

“Congratulations to the North Carolina legislature for responding to their constituent’s demand for legal mobile sports betting. Since the start of the year, our data shows more than 1.5 million geolocation checks from nearly 155,000 sports wagering accounts across the state. While our technology did not permit these individuals to bet, the interest is undeniable. It is also undisputed that regulation will give adult bettors in North Carolina safe and accountable options to wager and the state an important new revenue stream,” Pappas said.

Proposed sports betting revenue distribution

If approved, North Carolina sports betting tax revenues will be distributed as follows:

  • $2 million annually for gambling addiction and treatment services
  • $1 million annually to Division of Parks and Recreation for the purchase of youth sports equipment
  • $300,000 each annually to seven state universities for their athletic departments
  • $1 million annually to Outdoor Heritage Advisory Council for grants

If there is any remaining revenue, it will be distributed as follows:

  • 20% to 13 historically black colleges and universities for their athletic departments
  • 30% to a fund to attract major sporting events to the state (Super Bowl, March Madness, etc.)
  • 50% to the state’s general fund

Online sports betting licenses will cost $1 million for a five-year license.