(The Center Square) – Legislation to legalize sports betting in North Carolina moves to the Senate after members of the House of Representatives approved the measure on Wednesday.
House members voted 64-45 to approve House Bill 347 on third reading, confirming a second-reading vote on Tuesday. Lawmakers voted down 17 proposed amendments across the two days.
By Jan. 1, North Carolina could offer betting on sports via mobile apps and in person. Twenty-three states and the District of Columbia have online sports betting; 33 states and the District of Columbia generate revenue in the industry.
“Every month that goes by we’re leaving money on the table,” said Rep. Jason Saine, R-Lincoln, the bill’s sponsor. “We can’t afford to miss out on this opportunity.”
The legislation was sent to the Senate, where leaders have signaled its likely passage. Gov. Roy Cooper included $60 million in tax revenues from sports gambling for fiscal year 2024-25 in his proposed budget. Reporting by The Center Square, in conversation with analysts, pegs the annual number closer to $37 million.
Similar legislation that was split into two bills last session cleared the Senate, but the House version was a single vote shy of approval.
The motivation behind the bill is to capitalize on illegal sports betting that’s already occurring in North Carolina, Saine explained in committee hearings.
Analysis from the Spectrum Gaming Group that examined per-capita disposable income, spending patterns in eight states with legalized sports betting and other factors, estimates North Carolina could generate about $263 million per year in revenue for up to a dozen operators authorized by the bill.
Spectrum Gaming calculates potential tax revenues within three years at $37 million a year, based on the 14% tax rate on operators, before any promotional tax credits are applied.
A recent analysis from the Fiscal Research Division projects the tax will result in $2.9 million in tax revenue in fiscal year 2023-24, before growing to about $32 million by fiscal year 2025-26, then to $61.6 million by fiscal year 2027-28. That estimate takes into account the promotional tax credits.
Statutory distributions in HB347 would allow the Department of Revenue to retain $500,000 in revenues annually to offset the cost of collecting the tax. Two million dollars would go to the Department of Health and Human Services to fight gambling addiction; $1 million would go to the North Carolina Division of Parks and Recreation for youth sports development grants; $300,000 each would go to 10 University of North Carolina schools to support college athletics; and $1 million would go to offer sports grants through the North Carolina Outdoor Heritage Advisory Council.
Any leftovers would be distributed 20% to the UNC schools, 30% to the North Carolina Major Events, Games, and Attractions Fund, and 50% to the general fund.
Both support and opposition to HB347 has been bipartisan. Supporters have pointed to the lost revenue from illegal sports betting that’s already occurring in North Carolina. Opponents predict legalized sports gambling will lead to a surge in gambling addiction, which research shows feeds bigger issues like embezzlement, substance abuse and suicide.
Numerous representatives, both Republican and Democrat, spoke in opposition on the House floor.
“I have not heard one positive aspect of the gambling activity itself,” said Rep. Marcia Morey, D-Durham. “Not one good aspect … except money and greed.”
“The revenue this bill is expected to generate pales in comparison to the costs that will come with it,” said Rep. Tim Longest, D-Wake.
