North Carolina Senators voted 38-11 on May 31 to approve the second reading of an esports and sports betting bill. That means there’s one last Senate vote before HB347 will likely become law. Then the North Carolina esports and sports betting marketplace may launch on Jan. 8, 2024, or after.
If the bill passes, Gov. Roy Cooper will have up to 10 days to sign it into law. The state regulator would then have up to 12 months to launch sports betting, but not before Jan. 8, 2024.
The Senate reconvenes at 11 a.m. tomorrow but doesn’t have a listed agenda.
If the Senate approves HB347, the House needs to concur with that chamber of the North Carolina General Assembly before the bill can head to Cooper. He’s already said he’ll sign it.
One of the amendments Senators made to the bill was increasing the tax rate on online gambling operators from 14% to 18%. That adds $39 million more to state coffers during Fiscal Year 2027, according to a fiscal note’s estimate of $100.6 million in tax revenue during that time.
Before 38 Senators voted to move HB347 to its third reading, a few Senators spoke in opposition to the bill.
North Carolina Esports Not in Opposition Testimony
Esports betting, or betting related to the outcomes of video gaming tournaments, is included in HB347. The form of wagering isn’t exactly sports-related or akin to online casino gambling, either. However, it’s often lumped in with sports betting laws. That is, if esports betting is included in the laws.
However, it was even absent from strenuous objections to legalizing sports betting. (This bill legalizes online sports betting and esports, but retail sports betting has been legal in all three of North Carolina’s land-based casinos since 2021.)
Speaking of a glaring absence, HB347’s opponents also didn’t mention the possible cannibalization of tribal casinos’ revenue. That’s unlike the standard testimony against 2023 measures that would’ve legalized online casino gambling in states that already offer legal online sportsbooks. That was true even in states where, like North Carolina, the tribal casino owners will hold the online licenses.
Taking the Moral High Ground
While none of the Senators mentioned cannibalization worries, they did say the advantage of land-based casinos was that they might prevent or lessen problem gambling and addiction. They reasoned that making the effort to travel to the North Carolina casinos is harder for gamblers than pulling phones out of their pockets to click on gambling apps.
State Sen. Lisa Grafstein, D-Wake, testified:
It’s the problem gamblers that account for the profit.
She said online gambling “enticements” are “constant, and they’re microtargeted” in terms of marketing and advertising.
Grafstein told her colleagues today:
As we’ve seen in other states and countries, betting becomes central to sports.
She didn’t believe North Carolinians were betting en masse on illegal offshore sites because only tech-savvy people could do it. She thought most people were like her and, therefore, unable to bet on the illegal sites.
Ultimately, Grafstein compared online gambling to Enron:
There is a black box. We have no visibility.
Officials won’t be able to see how online gambling algorithms work, let alone understand them, she predicted.
Testimony centered on moral objections to gambling. One Senator likened gambling to heroin.
However, state Sen. Jim Burgin, R-Harnett, boiled his opposition down to one thought. He couldn’t vote for a bill to which his mother would disapprove.
Slippery Slope to Online Casino Legalization
Once North Carolina legalizes online sports betting, it’s only a matter of time until lawmakers see an online casino bill, Grafstein said.
This is the push that we will see coming.
She paraphrased Ecclesiastes to summarize legal online gambling:
There’s nothing new under the sun.
The house always wins, Grafstein concluded.
‘Terror States and Illegal Markets’ Prohibition Not in Bill
On May 4, Bonus published an article about how state lawmakers and regulators told online gambling operators that if they wanted to operate legally in the US, they’d have to purge their global operations of illegal offshore gambling sites.
Those efforts took two forms:
- State regulators sent a letter on April 28 to the US Department of Justice (DOJ) asking it “to make combating illegal, offshore sportsbooks and online casinos a priority.”
- State lawmakers proposed online casino bills with a “prohibition on authorization of online gaming agents operating in terror states and illegal markets.” Iowa Rep. Bobby Kaufmann, R-Wilton, also introduced HSB228 to add that language to the state’s existing sports betting law. Illinois Sen. Bill Cunningham, D-Chicago, introduced SB2558, which would’ve done the same to the Illinois Gambling Act (IGA). (All of those efforts failed in 2023.)
Howard Glaser, the global head of government affairs and legislative counsel at Light and Wonder (LNW), told Bonus today:
The provisions you wrote about are really most relevant to iGaming.
There’s no real effort to put them in sports-only bills.
Meanwhile, Massachusetts joined four other sports-only states and three sports betting and online casino jurisdictions in signing the DOJ letter.
The regulators for the sports-only states represent Colorado, Illinois, Louisiana, Mississippi, and now Massachusetts. Michigan, Nevada (online poker only), and New Jersey are the iGaming states on the letter.
Rebecca Hanchett reported for Gaming Today yesterday that all Massachusetts Gaming Commission (MGC) members signed the request to the DOJ.
Like Bonus, Gaming Today is a Catena Media brand.