A bill legalizing North Carolina sports betting apps has officially passed the state’s General Assembly.
By a 69-44 vote Wednesday, the House voted to concur with the Senate's changes to House Bill 347. That vote came a day after a 68-45 House vote after the bill’s second reading.
The bill now heads to Gov. Roy Cooper’s office. He’s expected to sign the bill, as he previously expressed support for sports betting. Cooper will have 10 days from when he receives the bill. He can either sign it into law or let the time lapse, allowing it to become law without his signature.
If he vetoed the bill, it would take a three-fifths majority in both chambers for an override.
How We Got Here
With the final vote in the House, it concludes what was, at times, a tumultuous couple of weeks where the Senate made some changes – including an unexpected one – to state Rep. Jason Saine’s North Carolina sports betting bill.
The Senate amended the bill to hike the tax rate from 14% to 18%, remove promotional deductions and include horse racing. The latter provision initially included language that allowed slot-like historical horse racing machines. That was subsequently taken out through another amendment limiting that expansion to just live racing and legalization of online parimutuel wagering accounts.
Then, while the full Senate was in the process of passing the bill last week, House Speaker Tim Moore first said the House would not concur with the changes, a move that would have required a committee from both chambers to hammer out a compromise.
A day later, though, Moore would tell reporters it was a misunderstanding, and the House would approve the Senate’s version of the bill.
Sports betting has been legal in North Carolina since 2019, when the General Assembly passed a law allowing it on-site at tribal casinos. Legislation to expand it statewide failed last year when a bill the Senate approved was defeated in the House by a single vote.
What’s In HB 347
The bill going before Cooper would allow the North Carolina Education Lottery to approve licenses for up to 12 online operators. The state’s two tribal gaming operators may also partner with an online sportsbook, and those agreements would not count against the state’s cap.
Online sportsbooks and horse racing wagering operators would pay $1 million for a license. Sportsbook revenue would be taxed at 18%, and the horse racing platforms would pay an annual fee equal to 1% of their handle.
HB 347 will also allow eight facilities that are home to major league sports franchises, professional golf tournaments or auto racing events to host a brick-and-mortar sportsbook.
No one under 21 would be allowed to wager on sports or horse racing in the state.
Tax revenues from sports betting would cover funding for problem gambling services and youth sports. It also would provide money for athletic departments at 13 state colleges and a fund to attract major events to the state. The state’s General Fund is expected to receive the remainder.
Once the bill becomes law, the Lottery Commission would have until Jan. 8, 2024, to establish the rules and regulations overseeing sports wagering. The official launch date has not yet been determined, although the lottery will have a year from the day the bill becomes law to allow sportsbooks to take bets.
Opponents' Final Debate Fails
While there was no debate on Wednesday, four House members who opposed the bill spoke out before the final vote and asked their colleagues to reject it.
State Rep. Pricey Harrison said that the Senate’s version was better in some ways, like raising the tax rate and removing promotional deductions. However, she still raised concerns that the tax rate goes against the state constitution, which limits income taxes to 7%. If a court were to reject the tax rate, she feared the state would not generate enough revenue to oversee operators and provide funding for problem gambling.
Supporters of the bill say the tax on sports betting operators is a privilege tax, not an income tax.
Harrison also criticized the Senate for including horse racing, a measure that the house removed during its first round of debate earlier in the session. Harrison said it was “an inhumane, terrible industry,” pointing to the recent decision by Churchill Downs Incorporated to suspend racing at its namesake track in Louisville after 12 horses died there since late April.
“It would have been nice to have some more thorough debate, and I don’t know if the Lottery Commission is actually going to regulate horse racing or if they’re qualified to regulate horse racing,” she said.
Sports Betting Community Reacts
After the final vote, lawmakers received congratulations from organizations representing sports betting operators as well as from others involved in the industry.
"Today is the culmination of years of hard work by North Carolina legislators, education and community stakeholders, and fans, and we extend our sincere gratitude to each for their tireless efforts," said Scott Ward, vice president of the Sports Betting Alliance. "Because of that work, North Carolinians are just one signature away from joining the tens of millions of Americans who can bet on their favorite teams using our safe, legal, and regulated sports betting platforms."
John Pappas, GeoComply’s senior vice president for government and public affairs, testified before lawmakers earlier this year, giving them information on the number of North Carolina residents who are seeking to wager on sports but have to travel to Tennessee or Virginia to do it legally.
GeoComply provides geolocation services to sports betting operators, ensuring those companies that bettors are physically in the state when they attempt to make an online wager. So far this year, GeoComply has tracked more than 1.5 million geolocation transactions inside the state.
Those are instances when one of the approximately 155,000 accounts held by a North Carolina resident has been accessed in the state.
“While our technology did not permit these individuals to bet, the interest is undeniable,” Pappas told BetCarolina after Wednesday’s vote. “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.
“Our team looks forward to engaging in the regulatory process, sharing best practices, and supporting our customer’s successful launches in 2024.”
Keep tabs on BetCarolina on the road to the state's launch, and we're also home to North Carolina sports betting promos for new customers.