NC Regulator to Review Internal Controls of Online Sports Betting Operators Before Issuing Permits

The North Carolina State Lottery Commission met last Wednesday, and a unanimous vote backed the proposal to review internal control documents of online sports betting operators that have applied for a betting permit in the state. The internal control documents of each applicant will be studied to ensure that each operator’s modus operandi complies with the betting laws and regulations of North Carolina.

As per the last update, nine betting license applicants are under review. The North Carolina State Lottery Commission has set Jan. 26, 2024, as the deadline for applicants to submit their internal control documents for review. FanDuel, DraftKings, and BetMGM were among the first seven online betting operators to join the queue to enter the Tar Heel State’s regulated betting market.

As the reviews commence, the state is yet to confirm the launch date for its promising sports betting market. When Governor Roy Cooper signed HB 347 into law in June last year, operators and players expected the market to go live at the end of the second quarter of this year. The governor is expected to shed light on this subject when the committee meets again at the end of January.

The governor hopes to see the market launch in time for legal wagering on March Madness odds. Meanwhile, Ripley Rand, who serves as commission chair and on the Sports Betting Committee, had previously stated that the go-live date will primarily depend on the license application and review process. If the entire process is smooth, NC online gambling apps could go live at the end of the first quarter of this year.

Ambiguity Looms Over NC Sports Betting Rules

As the internal control documents review is underway, the applicants are still waiting for the sports betting rules that will be in place in the jurisdiction. North Carolina is among a handful of regulated US jurisdictions that require sports betting operators to have a written designation contract with a professional sports team, motorsports facility, or a PGA tournament venue.

Many other states have legalized sports betting through shopping malls, online sources, or sometimes both. Some of these states are New Jersey, Colorado, and Illinois. To start sports betting operations, it is necessary to know the local laws and restrictions for each regulated jurisdiction, as these stipulations vary as per the requirements of that particular state.

Including North Carolina, sports betting is now legal in 39 jurisdictions, including 38 states and one federal district of Washington, DC. Each jurisdiction has established a set of its own gambling rules. For instance, Nevada and a few other states prohibit betting on in-state collegiate games and player prop bets. It will be interesting to see the jurisdiction-specific rules of NC.

Two New Applicants Have Joined the Queue

When the North Carolina State Lottery Commission green-flagged the sports betting license application process for its jurisdiction, it received seven permit applications. The applications came via Bet365, BetMGM, DraftKings, Fanatics, FanDuel, ESPN Bet, and Underdog Sports.

In the last committee meeting, it was announced that two more operators had submitted their application to obtain a sports betting license in North Carolina. Catawba Two Kings and Tribal Casino Gaming Enterprise Cherokee are the latest additions to the list.

According to reports, the state of North Carolina can issue sports betting licenses to 18 operators. Half of those slots could be occupied if all the current applications are approved. The regulator has kept a 60-day review window since the day of application to study the paperwork.

Written Designation Contracts of Applicants

As the launch date of the North Carolina sports betting market inches closer, sports betting operators who want to apply for a license will be looking for a written designation contract with a professional sports team, racetrack, or PGA venue. Almost all of the current applicants have already fulfilled this requirement.

A long-term deal was struck between Bet365 and Hornets Sports & Entertainment (HSE) in Nov. 2023 that made the operator the official mobile sports betting partner of the NBA’s Charlotte Hornets. BetMGM confirmed a market access agreement with the NASCAR racetrack Charlotte Motor Speedway earlier this month.

DraftKings has an agreement with NASCAR, while Fanatics North Carolina has struck a long-term deal with NHL side Carolina Hurricanes. The PGA Tour has established deals with FanDuel and ESPN Bet. Meanwhile, Underdog Sports North Carolina has not found a partnership for its written designation contract in the state.

The Regulator Has Approved Two Test and Evaluation Labs

Apart from backing and accepting the decision to review internal control documents of applicants and issuing a deadline date for submitting these documents, the North Carolina State Lottery Commission also approved two test laboratories that can assess gaming equipment and software to ensure compliance with the state’s gambling law.

Gaming Laboratories International (GLI) and BMM Testlabs are the two independent institutions that have received the regulator’s approval. The door is still open for other laboratories to serve as independent testing institutions, and the state’s regulator is waiting for more entities to apply for this purpose.

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About the Author
Nikhil Kalro

Nikhil Kalro

Nikhil Kalro covers the sports betting industry and revenue reporting at Gaming Today. Much of his work analyzes state revenue information, including betting activity and revenue for individual states and sportsbook operators. In addition, Nikhil provides news updates on the gambling industry itself, including product launches and legal issues. Nikhil’s previous experience includes five years with ESPN.

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