Senators may soon consider North Carolina esports legalization along with an online sports betting bill, HB347. The bill that passed the House received its first reading in the Senate on March 30. That means there’s plenty of time for that chamber of the North Carolina General Assembly to vote on the bill before lawmakers adjourn on Aug. 31.
The measure introduced on March 13 refers to the form of betting on video game competitions as “electronic sports.” Primarily sponsored by state Rep. Jason Saine, R-Lincoln, the online sports betting and esports bill has 51 bipartisan sponsors.
HB347 classifies North Carolina esports as “interactive sports wagering” and, as such, outlines the same 14% tax rate as online sports betting operators are expected to pay. The marketplace launch date in the bill is Jan. 8, 2024. Bettors must be at least 21.
Putting North Carolina Esports in Perspective
Esports is still emerging as an online betting option.
An esports bill is pending in Pennsylvania. HB733 also taxes esports at the same rate as sports betting, which is 36%. However, its sponsor – state Rep. Ed Neilson, D-Philadelphia – tells Bonus the bill’s language may change.
Colorado, Tennessee, and New Jersey allow online sportsbooks to offer esports betting. Nevada is also working on online esports betting regulations.
Even so, no standalone US esports operators exist, perhaps because of the tax rates. Before the only standalone esports skin in the US, Vie.gg, shut down on Nov. 1 in New Jersey, the former CEO of Vie.gg’s parent company, Malta-based esports betting company Esports Entertainment Group (EEG), made a comment to Bonus. He said taxing esports at the same rate as online sportsbooks is unrealistic because far fewer esports events are approved for legal bets than are sports events.
Still, at least two brands appear poised to join the game in the US. Rivalry is already accepting esports bets in Ontario and Unikrn, now owned by Entain, is expected to relaunch soon in the United States.
In the meantime, about half of New Jersey’s online sports betting operators accept esports bets, said Anthony Strangia, a deputy Attorney General with the New Jersey Division of Gaming Enforcement (DGE). Strangia made the statement on March 1 at the Casino Esport Conference (CEC) in Las Vegas, according to CDC Gaming Reports.
How North Carolina Esports May Differ
Retail sportsbooks launched in North Carolina in 2021. In the 2023 esports and online sports betting bill, North Carolina is looking at having a list of approved esports events, notes Cody Luongo in his April 6 Sharpr enewsletter.
The newsletter about “the intersection of esports and betting” highlights how the North Carolina esports proposal differs from other state laws.
Luongo, who is also Rivalry’s senior manager of corporate communications, writes:
Sharpr Take: North Carolina’s regulation is unique in how a big a role game publishers can take on, as well as the potential to enter commercial revenue sharing agreements. With that being said, it seems unlikely publishers will exercise these rights, at least for the foreseeable future.
As I’ve said many times in the past …, game publishers want to keep a healthy distance between themselves and betting (regulated or not). While it would be hard to imagine publishers are completely unaware of the betting activity on its games, openly addressing it, almost in any form, is typically a one-way ticket to public reckoning. I mean, look at how well Riot Games’ reported exploration into betting sponsorships for Valorant went. It’s sensitive stuff.
Specifically, HB347’s language is:
In the context of electronic sports, the sports governing body shall be the video game publisher of the title used in the electronic sports competition, regardless of location.
With two states working to legalize esports betting, the form of online gambling has more viable current legislation than online casino gambling. Only New Hampshire may legalize the latter during 2023. On April 6, SB104 entered the House Ways and Means Committee. The Senate approved the New Hampshire online casino bill on March 30.