At the opening of the current relatively brief spring session of the General Assembly, Rep. Jason Saine, who has championed online North Carolina sports betting legislation, said a concern was that bill would simply run out of time.
The online sports wagering bill has been passed in the state Senate, but not by a huge margin. The state House has until June 30, when the current session ends, to pass the bill, along with what is known as a “trailing” bill, to deliver online sports gambling to the state. Otherwise, a long wait starts all over.
“Some folks are as ready to vote on this as I am simply because we’ve talked it to death, which was part (of) the intent. ... We’ve got fatigued from a long session last year,” Saine said less than a month ago. “People want to get in and out, so they’re not surprised when I say we want to move on this thing fairly quickly. … I don’t want to get up against the clock and not get it done.”
It’s not time to panic yet for online sports wagering advocates but the clock is ticking.
Here’s the strategy that Saine laid out as the current session started. He’d like to get a House approval on the general sports wagering bill and then get that trailing bill passed after-the-fact. However, it is the trailing bill that will include the nuts-and-bolts that will actually define the shape of sports wagering as far as benefits to the state.
We’re talking about tax rate, promotional deductions allowed to the sportsbooks, upfront fees and even what gets funded by the tax dollars raised.
Before getting around to where those things stand and where they’re likely to go, it’s highly important to note the trailing bill is still in the putting-pen-to-paper stage, according to observers of the process.
Input has been received by the stakeholders and political sentiments are largely understood. Eventually, there will be a moment when all sides will have to be assuaged to finally allow North Carolinians to do what sports fans in neighboring Virginia and Tennessee (and many other states) can already do — which is conveniently, safely and legally bet using North Carolina sports betting apps on their smart phones or computers.
Key Items in Trailing Bill
Here's the ground likely to be covered in the trailing bill:
- Tax rate. The bill that passed the state senate has an 8% tax rate. When an online sports wagering bill was first crafted, that didn’t seem so out-of-line. However, the Virginia tax rate is 15% and Tennessee is 20%. Clearly, the 8% rate will have to increase.
- Application Fees. Those are at $500,000 at the moment. They may have to double.
- Funding. So where will the tax money go? An online sports legislation champion in the state Senate, Sen. Jim Perry, argued the funding shouldn’t be earmarked. But some House members may want something more definitive on where the money is channeled, or some portion of it, say to education. Also, a big chunk of funding (50%) is supposed to go to attracting major sports events to the state. That may be a hard sell.
- Promotional deductions. Lately, state legislators elsewhere, such as in Colorado, have woken up to the fact that allowing sportsbooks to deduct their bonus and promotional expenses used to attract customers from their taxable revenue is cutting deeply into state tax receipts. So, a cap on such deductions or a sunset on them will likely be part of the discussion.
When Will Politics Come Into Play?
Saine’s strategy of getting a broad sports wagering bill passed and then filling in the blanks on some of the above issues could run into some friction, particularly from some Democrat members. It is fair to note the state Senate version of the bill was bipartisan in that it was sponsored by Perry, a Republican, and Sen. Paul Lowe Jr., a Democrat. So, sports wagering isn’t necessarily a red-blue battleground issue in North Carolina, but each side does have its lean on what’s important in such a piece of legislation.
So far, Saine has been an artful shepherd of the legislation, and he does wield influence as a senior chairman of the House Appropriations Committee.
Speaking of committees, the online sports wagering bill that passed in the state Senate has already passed through the House Commerce Committee fairly easily, but it’s in a holding pattern at the House Judiciary Committee. Beyond that, is the House Rules Committee and the House Finance Committee. Then, it’s onto the full House.
Also key in all this is the state Senate has little appetite in tackling a dramatically restructured basic bill.
Framework of a Strong Bill is Already There
The bill being considered in the House lays out the outlines of how online sports gambling will look to customers. The number of operators in the bill are 10 to 12 and it is assumed they will include familiar national players such as DraftKings and FanDuel. The two casinos owned by the Eastern Band of Cherokee Indians, operated by Caesars Entertainment in the western part of the state and which already have retail sportsbooks, would also get online licenses.
Bill language says: “Wagers would be authorized via mobile devices, computer terminals, or similar access devices in places of public accommodation, which are defined as property containing a sports facility, or property owned or controlled by the owner or operator of a sports facility or affiliated with the owner or operator that is within one-half mile of the sports facility. A sports facility is a facility that hosts professional sports with a minimum seating capacity of 17,000 people or is a facility that hosts an annual professional golf tournament.”
Betting would be allowed on pro sports, college sports, eSports and amateur sports, such as the Olympics, and whatever else regulators approve.
The North Carolina State Lottery Commission would be charged with regulating online sports wagering.
Still, if all goes well, it is unlikely online sports wagering will begin before 2023 although advocates can be optimistic about the 2022 football season.
But first, June 30 looms.
