NC Senate panel advances sports wagering bill with higher tax rate, other big changes

Sports wagering operators would pay an 18% tax rate on gross wagering revenue and bettors could place in-person wagers at sporting venues under a Senate proposal for legalized mobile sports gambling that passed a committee Wednesday.

The House passed House Bill 347 in late March. Its next stop is the Senate Finance committee. It will not be on the Senate floor this week, according to bill sponsors.

It contains numerous changes to the House version, many of them less friendly to operators. The crux of the bill remains the same: If it becomes law, it would allow betting on professional, college and other sports through apps on mobile devices for people located in North Carolina beginning Jan. 8.

"This is not legalizing it, in as much as it's taking place," said Sen. Tim Moffitt, a Henderson County Republican. "This is just recognizing that this practice exists, is going to exist, has existed since the beginning of time. It's increasing with access to smartphones and technology."

Sports betting is legal in North Carolina, but only in-person at three tribal casinos.

Moffitt said the Senate has been working with the House on changes and "from what we understand, they're supportive." Rep. Jason Saine, the lead sponsor of the legislation in the House, said the Senate "has been very good about keeping me in the loop."

"I'll wait to see what their final product is," said Saine, a Lincoln County Republican. "I know for them, just like us, they have a ways to go until they get it over the finish line."

A similar measure failed by a single vote in the House last year. But it passed this year's version 64-45.

Among the changes:

• A tax rate of 18% up from 14% in the House version. The Senate version does not allow operators to deduct promotions or credits, which would increase their tax liability. The House version allows operators to deduct promotions and credits, often used to attract new customers, for several years before they are phased out.
• Allow in-person sports betting at certain sports facilities with cash. The House version only allowed betting through mobile devices at those same "sports lounges." The change could attract bets from many casual fans, who don't want to download an app on their phone but would be willing to place a wager on the game they are attending. Bettors would have to show their ID to place wagers in person.
• Adds Charlotte, East Carolina and App State to the list of UNC System college athletic departments that would receive $300,000 annually plus 20% of proceeds from sports gambling after other payouts.
  
  Charlotte was originally left out of the bill, but added through an amendment. The House version did not include any Football Bowl Subdivision schools in its list. ACC members UNC and NC State are not included.
• Allows pari-mutuel wagering on horse racing. It was stripped out of the House version.
• Requires sports wagering operators put on their application if they have a "documented history of partnership with a sports facility, if any, and the intentions of that partnership to offer the placement of sports wagers at a place of public accommodation." Also requires operators put on their application if they have a history of job creation and capital investment in the state, which would seem to put teams and facilities in control of the licenses. Those conditions are not present in the House-passed version.
  
  Professional sports teams and venues in North Carolina pushed for similar changes before the legislative session.
  
  "You're going to have a mix of who is going to get those licenses from the operators and the teams," Moffitt said. "They're (teams) part of the market. Excluding them was never really contemplated, but making it clear they could participate was intentional."

Several gambling critics spoke at the hearing, urging lawmakers not to vote for the proposal and add more state-sanctioned gambling in North Carolina.

"All the money in the world that we might gain from this bill, even whatever regulation it provides, can never replace the virtues that will be diminished because of its legalization," said Rev. Mark Creech, the executive director of the Christian Action League.

The venues that could allow in-person sports wagering are facilities that host a NASCAR national race or a professional golf tournament where more than 50,000 live spectators are anticipated to attend or are home to a team that competes in MLB, MLS, NBA, NFL, NHL or the NWSL.

On Tuesday, a House committee discussed a bill to legalize video gaming terminals in the state. Some lawmakers have also discussed allowing casinos in the state as Virginia has opened some on the North Carolina border.