(The Center Square) – Projected tax revenues from legislation to legalize sports wagering in North Carolina increased by about $10 million a year under changes approved by a Senate panel on Wednesday.
Members of the Commerce and Insurance Committee approved substitute language for House Bill 347 increasing the proposed tax from 14% to 18% on up to a dozen sports wagering operators. Also, promotional credits operators could deduct from revenues was eliminated.
The Spectrum Gaming Group previously analyzed per-capita disposable income in North Carolina and spending patterns in eight states with legalized sports betting to estimate operators could generate about $263 million per year in revenue.
Matt Roob, Spectrum Gaming’s senior vice president of financial analysis, told The Center Square that translates to about $37 million at 14%, or about $47 million at 18%, after three years. The analysis does not take into account promotional credits.
Another change approved Wednesday adds an advanced deposit wagering license with a $20,000 fee to offer pari-mutuel wagers used in horse racing, which would come with an annual 1% tax on the total pari-mutuel wagers placed by state residents.
Henderson County Republican Sen. Timothy Moffitt, who presented HB347 to the committee, noted that 30 states and the District of Columbia have already legalized sports wagering since 2018. He said illegal sports betting already occurs in North Carolina.
He said HB347 simply capitalizes on that reality to regulate and tax the industry, both through mobile wagers and on-site betting at professional sports venues. Tax revenues generated would go to fight gambling addiction, youth sports development grants, and University of North Carolina System school athletics programs.
Similar legislation cleared the Senate last session but was defeated by a single vote in the House. HB347 cleared the lower chamber in March on a vote of 64-45, with bipartisan support and opposition.
Republican leaders in the General Assembly have signaled they expect the legislation to gain approval in the current session, a sentiment shared by Democratic Gov. Roy Cooper. The governor, with 19 months to go before his term limit ends, included $60 million in tax revenues from sports betting in his proposed budget for fiscal year 2024-25.
Wednesday’s amendments were offered by Sen. Jim Perry, R-Lenoir, who recently told the media the bill has support to pass the Senate. Approval would make North Carolina the third state this year to legalize sports betting, which is already permitted at tribal casinos. Betting would potentially begin on Jan. 8, if approved.
Several opponents who testified in the Senate on Wednesday predicted HB347 would lead to a surge in gambling addiction, theft, embezzlement, job loss, child abuse, suicide and other serious problems, if approved.
John Rustin, president of the North Carolina Family Council, cited “decades of research” that shows 3% to 5% develop gambling issues, translating to tens of thousands of state residents who could be negatively impacted by legalization. Others who testified pointed to dozens of studies that show sports gambling is at least twice as addictive as other forms of gambling.
“North Carolina should seek ways to make our citizens winners instead of losers,” he said.
Christian Action League of North Carolina Executive Director Mark Creech said sports gambling would supplant traditional values of sacrifice, responsibility, and perseverance with “luck and chance as a new set of values.”
“All of the money we generate from this bill,” he said, “will never replace the virtues that are demolished because of its creation.”
HB347 moves to the Senate Finance Committee for further review.