One more vote and North Carolina sports betting will take a massive step forward to becoming a reality.

The North Carolina Senate approved HB 347, a bill to legalize online and brick-and-mortar sports betting, by a vote of 38-11. The bill will allow up to 12 online sports betting licenses in North Carolina and brick-and-mortar sportsbooks in and around professional sports stadiums and arenas.

The bill requires a second Senate vote before it can be sent to the House of Representatives for concurrence.

Will the House agree to amendments?

After several months with no public discussion, the sports betting bill has raced through three Senate committees this past week on its way to the Senate floor. It received favorable reports from the Senate Commerce and Insurance committee, Finance committee, and Rules and Operation.

A second vote on the bill is expected in the Senate Thursday afternoon.

If approved, it will head to the House of Representatives for concurrence. The bill has been considerably amended 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.

If approved by the House and signed into law by Gov. Roy Cooper (D), 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.

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.

Problem gambling concerns discussed

While the bill was approved, several Senators expressed their distaste for the expansion of gambling and potential increase in problem gaming.

Sen. Julie Mayfield (D-49) said sports betting is an activity recognized to be on par with heroin, cocaine, and opioids in term of its addictive nature. If the Senate could go back in time to regulate opioids, regulate tobacco, provide better safeguards, there is no doubt it would, she said.

“Gambling is already available in North Carolina with guardrails. You have to physically go someplace to gamble. It’s only available in a limited number of places. I’m afraid in a decade we’ll regret limiting the guardrails that we’re considering today,” Mayfield said.

The bill estimates that $7.2 billion will be bet in the state during its fifth year of operation, Sen. Jim Burgin (R-12) said.

That’s not new money coming into the state, he noted, but money that’s being re-allocated from other uses.

“That’s money currently in the state being spent on kids, food, and rent,” he 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.