Analytical look at North Carolina’s sports wagering revenue
In the first three weeks since sports betting became legal in North Carolina, residents wagered over $659 million, according to a report released by the North Carolina State Lottery Commission (NCSLC). This report, which compiles the sports wagering activity for March, provides a fascinating insight into the impact of legalized sports betting on the state’s economy and society.
From March 11 to March 31, North Carolinians wagered $659,308,541 on sports events, including paid and promotional wagering revenue. From these wagers, they won $590,750,303. The gross wagering revenue for March, which is the total amount received from sports wagers less the amounts paid as winnings before any deductions for expenses, fees, or taxes, was $66,496,213. State law imposes an 18 percent tax on the gross wagering revenue generated by sports wagering activity.
The tax proceeds from gross sports wagering revenue are allocated according to the law as follows:
- $2 million annually to the North Carolina Department of Health and Human Services (NCDHHS) for gambling addiction, education, and treatment programs.
- $1 million annually to North Carolina Amateur Sports to expand opportunities in youth sports.
- Up to $300,000 annually to collegiate athletic departments at 13 state universities.
- $1 million annually to the North Carolina Youth Outdoor Engagement Commission for grants to help cover the cost of travel to in-state or out-of-state sporting events and to attract amateur state, regional, area, and national sporting events, tournaments, and programmes.
- Certain reimbursements to the NCSLC and the NC Department of Revenue (NCDOR) for expenses incurred to implement and administer the new law.
Any remaining proceeds are distributed as follows:
- 20 percent evenly among the 13 state universities to support collegiate athletic departments.
- 30 percent to a new North Carolina Major Events, Games, and Attractions Fund to foster job creation and investment in the state.
- 50 percent to the state’s General Fund.
Impact of regulatory changes
The legalization of sports betting in North Carolina has also necessitated the creation of new rules and regulations to govern the industry. The deadline to comment on the rule-making process for the third set of wagering rules is Friday, 19 April. These rules include changes such as the elimination of the use of “Wagering Lounge” for “Wagering Facility,” the introduction of international criminal history record checks triggered by residency, and the clarification of the treatment of seized winnings from voluntarily excluded players.
The process also contains two new proposed rules. The first proposal sets a deadline for licensees to respond to a formal letter of inquiry from the commission, which will likely be used in investigations where there are specific questions and possible requests for documents from licensees. The second proposed rule addresses the inspection of wagering facilities, both pre-operational and subsequent inspections.
The legalization of sports betting in North Carolina represents a significant shift in the state’s approach to gambling. The rapid growth in wagering activity, the substantial tax revenue generated, and the societal impacts of this change are all areas that warrant further analysis and discussion. As the state continues to navigate this new landscape, it will be interesting to see how these developments shape the future of sports betting in North Carolina.
