By Brian Murphy, WRAL sports investigative reporter

Raleigh, North Carolina – North Carolina sports bettors could place legal online bets as early as this football season if state lawmakers pass a bill in the new legislative session.

Senate Bill 688 passed a divided North Carolina Senate last year and supporters of the bill say the legislation has enough support to pass the House in the “short” session of the House. ‘State, which began on Wednesday. Governor Roy Cooper has indicated in the past that he will sign legislation legalizing online sports betting.

“We just want to make sure we’ve amplified the votes, and I think we have,” said Sen. Paul Lowe, D-Forsyth, sponsor of the bill, in an interview with WRAL News. “I feel confident about it.”

Sports betting is currently legal in North Carolina, but only at the two Cherokee casinos in the far west of the state. The legislation would allow up to 12 online sports betting operators to take mobile bets from users located in the state. North Carolina is reportedly joining a growing list of states to legalize large-scale sports betting after a 2018 U.S. Supreme Court ruling opened the door to state-by-state rulings.

About half of US states have legalized online sports betting, including southeastern states such as Virginia, Tennessee, West Virginia, Maryland, and the District of Columbia. Kansas became the latest state to approve mobile sports betting earlier this month.

“We’re ready to rock ‘n’ roll. I haven’t heard any new opposition,” State Rep. Jason Saine, R-Lincoln, an advocate for the bill, told WRAL News. “I think we have a pretty smooth glide path once we start session riding.”

Lots of money and support

Legalized sports betting has majority support across North Carolina, according to WRAL News poll results released in April. About 52% of respondents said sports betting, including online gambling, should be legalized in the state. Support reached or exceeded 50% among Republicans, Democrats and unaffiliated voters. Twenty-eight percent said widespread sports betting should remain prohibited by law. Another 19% said they weren’t sure.

Proponents say the approval will allow the state to capture millions of dollars in gambling-related revenue each year and reduce the use of unregulated offshore sites. “When individuals see other businesses doing the same thing and doing it in our state, and we’re not making any revenue from it, kind of a light bulb goes out,” Lowe said. “People do that anyway.”

He mentioned the number of sports betting ads shown during major sporting events, such as the Super Bowl and the NBA playoffs, offering legal betting in other states. Many sports betting operators are associated with sports leagues, teams and sites.

“That’s a lot of lost revenue that our citizens are taking part in,” he said, “and we’re not getting anything out of it and some of those [offshore] the sites are not safe,” he said.

Statehouse social conservatives pushed back on the proposal, saying it would lead to increased gambling addiction and harm society and families. Some Democrats also oppose additional play in the state, concerned about its impacts on low-income residents and college athletics.

For a state with an annual budget of $25 billion, sports betting revenue is unlikely to be a game changer. Tennessee, a state like North Carolina that has professional sports franchises in the NBA, NHL and NFL and popular college teams, collected $4.6 million in taxes in March on $370 million in sports betting, according to the Tennessee Sports Wagering Advisory Council. Sports betting generated $22.7 million in adjusted gross income during the month.

Virginia legalized online sports betting in January 2021. It has since collected $26.7 million in taxes. Twelve companies can take sports betting in Virginia, but only five have paid taxes because the state, like Tennessee law and proposed legislation in North Carolina, allows companies to waive certain expenses, including expenses promotion and credit to reach its total adjusted gross income.

Potential changes to the Sports Betting Bill

Under the bill, sports betting would be allowed on professional sports, college sports, e-sports and amateur sports like those in the Olympics. Betting on youth sports, such as high school games and horse racing, would not be allowed under current law.

Operators would pay $500,000 for a five-year license, which can be renewed for $100,000. The Lottery Commission would oversee sports betting in the state. The legislation provides for an 8% tax on operators’ adjusted gross income, which allows certain expenses, including promotional credits, to be deducted from total gross income.

License fees and tax rate are low compared to other states. Illinois, for example, imposes a $20 million fee and a $1 million renewal fee every four years. Pennsylvania charges a license fee of $10 million with $250,000 for renewals. New York taxes operators at 51%. Virginia taxes adjusted gross income at 15%. At a committee hearing in November, some North Carolina lawmakers asked if the tax rate could be increased.

Saine said the House will pass the exact same bill that the Senate passed, which passed the bill 26-19 with more Republicans voting no than yes. Once passed, lawmakers could attempt to pass a second bill doubling licensing fees, raising the tax rate to 14% and making several other technical changes to the bill.

“No sense in reliving the wounds that may be there. It will or will not happen in the House as the Senate sent it to us,” Saine said. “Based on conversations I’ve had with other members, they seem to agree with this approach.”

Said Lowe: “Once we pass this bill, there will be some adjustments that we will make. But right now we’re just trying to get him out of the chute.

Where will the tax money go?

Under current law, half of the tax collected would go to a newly created fund for major North Carolina events, games and attractions, administered by the North Carolina Department of Commerce.

The fund can be used to provide grants to major events that have chosen a site in North Carolina — after considering multiple sites outside the state — to host an event held no more than once a year. The legislation defines events as “entertaining, musical, political, sporting or theatrical” and states that they must take place at a sports facility or be sponsored by a major golf association.

The state Lottery Commission also reportedly donates $1 million annually to the state Department of Health and Human Services for gambling addiction treatment and education programs.

Lowe said he wanted some of the money to be used for education.

“Education, education. Plain and simple,” he said. “Certainly we want to do everything we can for K-12. I’m still concerned about things like Head Start, still concerned about higher education. When we talk about education, we have to look at the whole range, the teachers. Community colleges even need help to be competitive.

The state’s three major professional sports teams — the Carolina Hurricanes, Carolina Panthers and Charlotte Hornets — support the legislation. They, along with Charlotte Motor Speedway and others, could benefit from the bill since the owner or operator of a sports facility that hosts professional sports and has a capacity of at least 17,000 people (or hosts a tournament professional golf club with more than 50,000 live spectators), can open a sports lounge near its venue. Customers are still expected to place their bets electronically, but the facilities could be a way to lure sports fans to venues that might otherwise be unoccupied for much of the year.

“I’m very confident this will pass early in the session,” said Ches McDowell, a Hornets lobbyist who worked on the legislation.

If the legislation passes this quickly, it could take several months before punters can start creating accounts with mobile operators and placing bets.

“It’s conceivable, if not at the start of the football season, certainly in the middle of the season,” Saine said. “There may have been a few games played already, but I think everyone involved in it knows something could happen. It’s not a shock to anyone.”