(The Center Square) – Legalized sports betting in North Carolina could soon get a House floor vote after two committees approved the measure in the lower chamber on Wednesday.
Members of the Finance and Judiciary committees reported House Bill 347 favorably. The legislation, which would authorize online and in-person sports betting, now moves to the Committee on Rules, Calendar and Operations of the House, typically the final stop before a floor vote.
Sponsor of the bipartisan bill, Rep. Jason Saine, R-Lincoln, told members of the Judiciary Committee that could happen next week.
Saine explained the motivation behind the bill is to capitalize on illegal sports betting that is already occurring in North Carolina. The Old North State would join 33 others and the District of Columbia that have legalized the practice and collect tax revenues.
Democratic Gov. Roy Cooper has cited the same reasoning. He included $60 million in tax revenues from sports gambling for fiscal year 2024-25 in his proposed budget unveiled last week.
“Our … tax rate of 14% (in the bill) is slightly higher than the statistical average” of states that have legalized sports gambling, Saine said, adding that the included $1 million licensing fee “would be one of the highest in the nation.”
Estimates of similar legislation in the previous legislative session suggested North Carolina could reap between $8 million and $20 million in tax revenues, while others have predicted up to $50 million. 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 operators.
Spectrum Gaming calculates potential tax revenues within three years at $37 million a year, based on the 14% tax rate, before any promotional tax credits are applied.
Lawmakers on Wednesday noted the program will launch with a $14 million loan from the state’s lottery fund that will be required to be repaid within 36 months.
Rep. Pricey Harrison, D-Guilford, suggested in the Judiciary Committee that HB347 may violate provisions of the North Carolina Constitution that limits the state income tax rate to 10% and prohibits monopolies. Legislative staff responded that neither concern has been litigated, but language in SB347 that would allow up to a dozen operators seemingly negates the latter concern.
Harrison also offered numerous amendments to the bill in committee, all of which failed to gain acceptance. They included the removal of horse and greyhound gambling; an increase of fines for violations from $10,000 to $1 million; prohibitions against advertising at schools and amateur events; to increase the license fee to $10 million; and the removal of betting on amateur and Olympic sports.
Saine defended those aspects of the bill, though he said discussions are underway on greyhound gambling, which may be removed in an amendment on the House floor.
Harrison and Rep. Abe Jones, D-Wake, urged their colleagues to oppose HB347, as did representatives from Stop Predatory Gambling, God and Country Christian Alliance, and North Carolina Family Policy Council.
“We’re selling off our values for money,” Jones said. “It’s an industry that’s predatory. It’s a vice. You know it’s a vice, but we’re going to embrace it anyway.”
John Rustin, president of NC Family Policy Council, noted that statistics from states that have legalized sports gambling suggest “North Carolina can expect tens of thousands will be victimized by gambling addiction,” which research shows feeds bigger issues like embezzlement, substance abuse and suicide.
Several representatives from the sports betting industry testified in support of HB347 and called on committee members to approve.
John Pappas, senior vice president of government and public affairs for GeoComply, stressed that operators are “trusted, safe, and secure,” and highlighted statistics he said illustrate demand for online sports betting in North Carolina.
In the most recent NFL football season, Pappas said North Carolinians made 1.75 million attempts to access legal sports books in other states.
“Those players are taking to off-shore illegal sites to place their bets,” he said.
