N.C. Senate gives tentative approval to sports wagering bill

The state Senate gave a key approval Wednesday to a bipartisan sports-wagering bill that would allow North Carolinians to place a bet on professional and collegiate sports with a select group of waring operators.

Senate Bill 668 was approved by a 26-21 vote on second reading. A third reading is set for Thursday.

The bill is expected to face opposition from House members, including some in the Triad, who are not in favor of expanding North Carolinians' access to legalized gambling.

Sens. Paul Lowe, D-Forsyth, and Jim Perry, R-Lenoir, are primary sponsors of SB668, which was filed on April 7 and not addressed until resurfacing unexpectedly Aug. 3.

Lowe and Perry have emphasized SB668 could play a pivotal role for the state’s three highest-level professional teams in terms of additional revenue to compete with rivals who reside in states that have approved the forms of gambling permitted in SB688.

During the committee steps, some Senate members and members of the public questioned the potential socioeconomic effects, such as perpetuating gambling addiction, of allowing the proposed level of sports wagering.

Perry said during Wednesday's floor debate that "prohibition doesn't work. We know the activity takes place today whether we like it or not."

"We can’t ignore that fact. It’s just not something regulated and taxed by the state.”

After saying, "I don't have all the answers," Perry added that "I would welcome you to visit with me."

"Let's put our heads together about bumpers that we could put on this in the future ... because it's going to continue to evolve and change."

For example, Sen. Kirk deViere, D-Cumberland, questioned last week whether the bill is necessary as an industry retention tool, in particular for the Carolina Panthers, Charlotte Hornets and Carolina Hurricanes.

Other states and communities are allowing on-site betting at their sports facilities as an additional revenue stream.

Perry said last week that “if the universe of competition for these sporting teams is all 50 states ... not having the ability to earn income from this would by definition put them at a competitive disadvantage as compared with teams in other states.”

 Perry said his discussions, including at the legislature, with officials of professional sports teams have addressed those concerns.

“They told us ‘they didn’t need a restrictor plate put on them by a restrictive state government to (keep) them to compete freely with the other organizations,’” Perry said.

House thoughts

Rep. Donny Lambeth, R-Forsyth, said Wednesday that SB688 "will be looked at very closely by the House."

"It is too early to tell, but I don't believe the House will move on it very quickly, especially with the large number of bills from the House that are still being held in the Senate."

Reps. Pricey Harrison, D-Guilford, and Lee Zachary, R-Yadkin, were less confident in SB668 gaining House approval.

"There is a healthy bipartisan group of House members who are opposed to gambling, including me," Harrison said.

"I don’t see how the bill moves through the House this year. It’s a big change for North Carolina, and it needs thorough vetting and deliberation."

Zachary said he is leaning toward opposing the bill, primarily because there are other gambling options in the state.

"There’s a Catawba Indian casino in our future. Rumor has it that it will be close to the North Carolina-South Carolina line where it intersects with I-85," Zachary said.

"There’s plenty of gambling opportunities through the N.C. Lottery. Practically all the folks I talk with feel we just don’t need any more gambling."

SB668 background

Sports wagering could bring in a potential $25 million to $50 million in additional funds for school construction, according to Lowe and Perry.

The bill would allow for betting on professional, college, electronic/virtual and certain amateur sports.

However, wagering on youth club and school sports would be prohibited, as well as on injuries, penalties, the outcomes of disciplinary proceedings against an individual, and the outcome of replay reviews.

SB688 does not affect wagering in fantasy sports leagues, which are based on the accumulation of statistics by athletes and players, or pari-mutuel wagering on horse racing.

Also prohibited: placing a bet for another person.

Lowe and Perry estimated that between $48 million and $50 million in annual tax revenue could be generated by authorizing and regulating sports wagering. There also would be licensing fees.

SB688 would expand the authority of the N.C. Education Lottery Commission to oversee sports wagering, with just 10 to 12 sports wagering operators allowed to accept bets.

The commission would collect an 8% tax on the monthly adjusted gross revenue of the licensed gambling groups. Half of that revenue would be diverted to the N.C. Major Events, Games and Attractions Fund.

Each wagering operator would be required to be licensed, pay a $500,000 licensing fee and submit to a credit-history, tax-record and criminal background checks. The license would be good for up to five years.

There would be renewal fees of $100,000 for interactive sports wagering licenses, $10,000 for a service provider license, and $5,000 for a sports wagering supplier license.

“It’s not an undertaking for the faint of heart,” Perry said. “It does require a great deal of money in this space.”

Lowe said during Wednesday's floor debate that views SB688 as "a revenue bill."

"If we can get more resources for our state, then maybe there is the possibility that more towns can do better by education."