The North Carolina Committee on Finance passed an amended version of a bill to legalize mobile sports betting Tuesday afternoon.
North Carolina General Assembly Staff Attorney Nicholas Giddings initially explained some minor amendments to HB 347, the most substantive being a change to enact sports betting in North Carolina at a date provided by the lottery commission, rather than a previously specified date. However, the date provided by the lottery commission must be within 12 months of the bill’s passage. The amendments were approved without further comment.
HB 347 passed the Senate Committee on Finance and was referred back to the Rules and Operations of the Senate. Although the current legislative session does not end until Aug. 31, the bill could come to an initial Senate vote as soon as this week.
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Sports Betting Finance Committee Testimony
North Carolina Senator Timothy Moffit (R, District 48) explained the financial package included in their mobile sports betting proposal. The bill contemplates four licenses: a $1,000,000 interactive sports wagering license, a $50,000 sports wagering supplier license, a $50,000 service provider license, and a $30,000 advance deposit wagering license. All licensing fees are due upon application. If an entity is denied a license, they will be refunded 95% of the application fee.
Senator Gladys Robinson (D, District 28) requested an explanation of the advance deposit sports wagering license. Sen. Moffit testified that this license is related to parimutuel wagering and would likely be requested by racetrack operators. Sen. Moffit explained that this license permits the pooling of wagers into one pot, with the race result determining the payout distribution.
Later, Senator Jim Burgin (R, District 12) asked if family members of individuals participating in amateur sports can place bets on those games. Staff Attorney Giddings responded that while those involved in a sport are prohibited from wagering on the game, there is nothing explicitly forbidding family members from placing a wager. Attorney Giddens also confirmed that micro betting — or betting on individual plays within a game — is permitted under the bill.
Sen. Burgin also expressed a concern that it appeared North Carolina was only receiving a 1.4% return on investment based upon the predicted economics contained within the bill. However, legislative staff explained that Sen Burgin’s calculation was based on total wagers, while the actual tax is placed upon sports wagers minus payout. Therefore, the 1.4% calculation was misconstrued. Fiscal research staff member Emma Turner estimated that the state would earn a $9.1 million boon in the first year of sports wagering legalization, and $43.4 mil in the fifth. The overall state economic impact is estimated to be $10.1 million in the first year and $71.1 in the fifth year.
Sports Betting Opposition in North Carolina
Three parties testified in opposition to the bill, two of which also testified against the bill last week in the Committee on Commerce and Insurance.
John Rustin, President of the North Carolina Family Policy Council, again argued that legalized sports gambling would have a detrimental impact on North Carolina citizens ranging from bankruptcy to substance abuse and other criminal activity.
Reverend Mark Creech, Executive Director of the Christian Action League, who also presented moral concerns to HB 347 last week, this week focused on financial opposition. Rev. Creech likened large sports betting platforms like DraftKings and FanDuel to companies like Amazon and Walmart. Creech is concerned that allowing those companies to operate in North Carolina and flood the market with advertising will divert discretionary income from local small businesses.
Finally, Dennis Justice spoke against the bill as a private citizen. Justice testified that he does not oppose sports gambling but believes that HB 347 has been rushed. Justice proposed waiting until next year’s legislative session and creating a gambling commission to better address concerns.
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