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State of the Union: US Sports Betting Update – North Carolina Could Become the Next State to Legalise Sports Betting

State senators have voted overwhelmingly in favour of making North Carolina the next US state to offer legal sports betting. Republican Senator Jim Davis has introduced a bill called S154 in a bid to allow the Eastern Band of Cherokee Indians to launch a sportsbook on its tribal lands. It passed through the Senate by a vote of 43-7 at its second reading this week and that puts the Tar Heel State at the front of the sports wagering queue. It now has to pass through the House, but Davis is hopeful that it will scrape through before the legislative session ends in June.

One reason for the bill’s initial success could be its limited scope. It is one of the shortest of the myriad sports betting bills circulating across the country. The Eastern Band of Cherokee Indians is the only tribe that has agreed a compact with North Carolina and it operates two casinos – Harrah’s Cherokee Casino Resort and Harrah’s Cherokee Valley River Casino & Hotel, which are part of the Caesars’ empire. S154 would add sports wagering to the list of gaming options that these two casinos can offer.

Crucially it does not include online and mobile wagering. Figures in New Jersey, where bettors can choose to visit brick and mortar sportsbook or bet online, show that more than 80% prefer the latter. The only way for North Carolinians to bet legally on sports under the terms of S154 would be to drive out to one of the two Harrah’s properties. Both are located in the far west of the state, three hours away from Charlotte by car and six hours away from the towns on the east coast, so that is unlikely to appeal to many in the state. However, both casinos are near the borders with Georgia and South Carolina, so they could attract out of state sports fans.

An important first step

If the bill passes, it would also represent an important first step for North Carolina’s sports betting industry. Rhode Island began by offering just in-person sports wagering towards the end of 2018 and now it is desperate to add online wagering after seeing how popular it is in New Jersey. A similar situation could easily develop in North Carolina. Meanwhile, the South Carolina-based Catawba Indian Tribe hopes to muscle in as it has lodged plans for a $560 million casino in King’s Mountain, North Carolina, and this could also offer sports betting if it goes through.

The Cherokee have branded the idea a “modern day land grab” and a “federal government bully tactic”, but the Catawba say it could boost the tax the state makes on sports betting revenues by 33%. Davis estimates that sports betting will generate around $14 million in extra revenue each year for the Cherokee, which equates to around $1 million for the state. That is appealing for politicians looking to plug holes in the budget. Lobbyists at the conservative Family Policy Council have voiced concerns, predicting the bill will eventually lead to further gambling expansion, and it is hard to argue with that notion, but the economic argument has won out in many states already and it could well prevail in North Carolina too.

The race heats up

Several other states are also steaming ahead with legislation as the race to become the next jurisdiction to offer legal sports betting heats up. Bipartisan lawmakers in Ohio introduced a bill this week to legalize sports betting on professional and college sports. It calls for the state to take a 10% tax on all revenue and for some of this income to be used for education and gambling addiction programs. It would allow sportsbooks to spring up at Ohio’s 11 casinos, while online wagering could be tacked on if the courts agreed.

Over in Tennessee, legislators passed HB1 this week, five months after it was initially filed. State Representative Rick Staples created the comprehensive sports wagering bill for the 2019 legislative session. It only covers online sports betting and it also calls for a 10% revenue tax. HB1 would create a Tennessee Gaming Commission designed to regulate and oversee sports betting. The state does not have any casinos or racetracks, so it is unclear who would operate these sportsbooks.

HB1 has had several amendments since Staples filed it. The House State Committee passed the bill by a vote 12-5 this week, but not before subtracting prop bets from the bill. This means Tennesseans would be restricted to traditional sports bets like moneyline, points and spreads and could not delve into the wealth of special betting options available in other states. The bill will now head to the House Government Operations Committee for review. If it succeeds there, it will go the state’s full House.

Advancements in Iowa and Indiana

Indiana is also vying to become the ninth US state to offer sports betting after Nevada, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island and New Mexico. The Hoosier State’s House Ways and Means Committee advanced sports betting bill S 552 by a vote of 17-6 and it will now go to the floor. It established a 9.5% revenue tax, while the license fee was dropped from $100,000 to just $10,000. This is minuscule compared to the $10 million demanded by some states. It would allocate 3.3% of adjusted revenue to address problem gambling in Indiana. Mobile provisions have been taken off the bill, but they are likely to be reinserted after further debate.

Iowa lawmakers also advanced a major sports betting bill this week. It cleared a crucial Senate committee and it is now set to be examined in the entire chamber in the near future. SF 336 would allow riverboat casinos and racetracks in the state to launch sportsbooks, while third-party online operators could also enter the market. If this goes through, Iowa would become just the seventh state to offer mobile sports betting.

Its legislative session ends next month, but Iowa needs to keep pace with neighbouring Illinois, Minnesota and Missouri, which are all mulling sports betting bills of their own. If the whole body follows the recommendations of the Ways and Means Committee, the bill will pass to the House for a vote. It will be fascinating to see which state wins the race to become the next to offer sports betting, and we should expect a number of key developments in the weeks ahead.

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