North State Journal: Half measures on gambling won’t work well for North Carolina

Originally published in the North State Journal

North Carolina is entering a new era with the recent legalization of sports betting statewide, set to take effect on Jan. 8, 2024. Gov. Roy Cooper signed HB 347 over the summer at Spectrum Center, home of the Charlotte Hornets, but already industry advocates and gamers are wondering if this was a half measure in need of a broader vision for leveraging the potential for gaming in the state. 

iGaming, shorthand for online casino-style gaming, was left out of HB 347. State budget negotiations have been slowed by ongoing disagreement over how to incorporate iGaming into the new gambling status quo.   

NC lawmakers need to be proactive and create a framework for this activity.   

There’s a reason Gov. Cooper christened the expansion of betting on the Charlotte Hornets home court. Americans are wild for sports, and any conflicted feelings people may hold about the proliferation of gambling can be somewhat smoothed over by the love of sports. It’s an easier sell from a cultural perspective, and lawmakers from both parties know that fans see betting as an obvious extension of the sports fan experience.   

There is no getting past the financial benefit for North Carolina either, and Republicans in Raleigh were not gung-ho to turn down an estimated $74.9 million in new revenue from betting taxes and licensing fees for the 2024-25 fiscal year. Even better, that figure is expected to rise to nearly $100.6 million by 2028. Revenue will come from an 18% sports wagering tax placed on sportsbooks licensed by the North Carolina Lottery Commission and players will have access to mobile betting, as well as in-person wagering.   

iGaming is different, and it doesn’t have the benefit of association with ultra-popular professional sporting leagues and household names like FanDuel and DraftKings to place bets. This is access to state-sanctioned casino apps on a personal device or computer, so consumers and gamers can play the odds wherever they’d like, without having to set foot inside a brick-and-mortar casino.   

Casinos are a prickly subject in North Carolina, like anywhere else. They’re a hugely consequential from a development and job creation standpoint, as articulated by Senate President Pro Tempore Phil Berger, who said of traditional casinos, they’re “the only form of gaming where you’re going to see a significant creation of new jobs to the state, whereas you’re not going to see that with something on people’s phones.”   

That’s a fair point. For politicians working to strike a balance between practical benefits to their constituents and moral concerns, casinos represent a bargain they can present as tightly controlled. Mobile gaming comes with more question marks.  

Will it undercut investments made in physical casinos? How will iGaming account for age verification, an increasingly hot debate happening in state legislatures regarding social media access and pornography?   

These questions have been answered in Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia, where iCasinos have already been legalized for residents. Consumers like to have options when it comes to bets and gaming, and the argument that casinos would be undercut ignores the fact that they serve a different audience than people who enjoy iGaming. Age verification of gamers is also accounted for by the business model of gaming apps, where the cost per verification is baked into their profit outlook.    

The money generated for state coffers isn’t bad either. Connecticut’s iCasino sector generated $40 million in taxes, compared to a meager $13 million driven by sports betting. New Jersey had the same experience, with iGaming more than tripling revenue from wagers on sports. In both cases, physical casinos still raked in vast sums more than their digital counterparts.   

North Carolinians who want to gamble online, will gamble online. An unregulated market for this activity already exists, and the best response is always to create legal frameworks that protect consumers and benefit the state. A gaming commission would need to be established, and North Carolina could start by looking to Maryland as a model for bringing gaming and the lottery under the roof of a single commission.   

Half measures don’t make for good policy, and North Carolina opening the spigot on betting revenue should be based both on what consumers want, and what will maximize revenue for the state in return. It would be best to get out in front on iGaming and not have to play catch up on expanding consumer choice. When it comes to responsibly regulated online gambling and sports betting, everyone wins.   

Stephen Kent is a Greensboro native and media director for the Consumer Choice Center