North Carolina’s sports betting legalization chances took a big step forward, as members of the House of Representatives tonight approved an online sports betting bill on second reading by a vote of 66-45.

The third and final reading of Rep. Jason Saine’s (R-97) online sports betting bill, HB 347, will likely take place tomorrow. If approved on third reading, it will next head to the Senate where a similar sports betting bill was approved in 2022.

Saine’s bill was approved this morning by the House Rules, Calendar and Operations committee.

Sports betting advances in the House

This is the first time the North Carolina House of Representatives has voted in favor of a sports betting bill. A similar bill in 2022 was voted down by a single vote in the chamber during its second reading.

Saine’s bill will allow between 10 to 12 online sports betting operators and sets the state’s sports betting tax rate at 14% of adjusted gross revenue. Operators will be able to deduct promotional bets and bonuses from their taxable revenue with no limitations through 2024, but the deduction rate will decline through 2026 and be disallowed starting Jan. 1, 2027. Sports betting will be eligible to begin on Jan. 8, 2024, if the law is approved.

Saine’s bill underwent nearly two-hours of discussion, with the morality and economic impact of sports betting at the crux of the testimony.

By regulating sports betting, Saine said it can bring the market out the shadows and allow those who need help with problem gaming to be supported.

“The moral thing, and smart thing, is to regulate this market and give people with problem gambling the help and resources they need,” he said.

At market maturity, Saine said North Carolina could expect between $60 million to $80 million annually, a figure that was hotly contested by several of his colleagues.

Rep. Pricey Harrison (D-61) warned that states with legalized sports betting haven’t been coming close to their initial fiscal estimates and North Carolina will be no different. Add in the increased dangers of problem gaming, and Harrison said the state will regret legalizing sports betting.

As he did in 2022, Rep. Abe Jones (D-38) said the bill fails on its values, its policy, and its practical financial impact. North Carolina currently has a surplus, he said, and does not need the revenue brought in through sports betting.

Legalizing sports betting is a slippery slope, he said, and casinos throughout the state could be next.

“It’s going to bring in the loan sharkers (sic). It’s going to bring in other vices, prostitution, thugs, they’ll come in because they tend to follow the industry. They take advantage of the weak,” Jones said.

The sports betting industry preys on children, Rep. John Autry (D-100) claimed, and the onslaught of advertising will have a negative influence on them.

“The advertising that will be unleashed on North Carolina is targeting children to groom them to be gamblers. I can’t abide it.”

Several amendments defeated

Several amendments proposed for the bill and all were roundly defeated. Last year, an amendment to strip collegiate sports betting was approved by the House before its final vote.

This year, eight amendments were floated for the document, including a prohibition on college sports betting. Each of the following eight amendments were defeated:

  • Prohibition of college sports betting
  • Raising license fees from $1 million to $10 million
  • Delaying online sports betting launch for the next two years
  • Prohibition of amateur or Olympic sports betting
  • Raising online sports betting tax rate from 14% to 51%
  • Disallowing promotional credits or bets for sportsbook users
  • Prohibiting family members from placing bets on family members competing in professional or amateur sports
  • Increasing advertising regulation violations from $10,000 to $100,000 for sportsbook operators

Sports betting bill details

The proposed law allows bets on professional sports, college sports (including in-state schools), eSports, and the Olympic games.

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 10 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

Earlier today, Saine stripped language that would have allowed both dog and horse racing from the bill.