Sports betting’s economic impact

Experts estimate NC tax revenue could reach $100 million a year

On Monday, sports betting became legal in North Carolina with NC House Bill 347 going into effect. It comes just in time for the start of the men’s ACC basketball tournament and the NCAA tournaments.

But, although the month of March is arguably the most important time for sports in this hoops-crazy state, sports wagering won’t stop there.

According to BetCarolina expert Steve Bittenbender, North Carolina should generate a handle of $6.47 billion in its first year of sports betting. That places the state among the top 10 markets in the United States.

Interest in the Panthers, Hurricanes, Hornets and NASCAR should ensure sports betting will have lasting impacts on the state’s bottom line year round.

Here’s an idea of how sports betting will affect North Carolina as it takes full effect:

More money for the state

The Fiscal Research Division of the NC General Assembly estimates that sportsbooks will generate $64.6 million in tax revenue for the state during the first year. Projections rise to $100.6 million by the fourth year.

North Carolina lawmakers detailed a clear plan for the money collected from license fees and taxes imposed on sportsbooks. It includes more money to state departments, local governments and nonprofit organizations.

Annually, the state will allocate $2 million to the Department of Health and Human Services. That money will go to gambling addiction education and treatment programs.

Another $1 million goes to North Carolina Amateur Sports, for grants to local governments or nonprofit organizations to purchase equipment and upgrade public facilities to benefit youth sports.

The state will also allocate $300,000 to the athletic departments of the following universities: Appalachian State, East Carolina, Elizabeth City State, Fayetteville State, North Carolina A&T, North Carolina Central, UNC Asheville, UNC Charlotte, UNC Greensboro, UNC Pembroke, UNC Wilmington, Western Carolina and Winston-Salem State.

Then, another $1 million will annually go to the North Carolina Outdoor Heritage Advisory Council for grants to help local sports teams travel and to attract sporting events to the state.

Of the remaining funds, 20% goes to the athletic departments at the schools listed above. 30% will go to the North Carolina Major Events, Games and Attractions Fund. 50% will go to the state’s General Fund.

Consumer protections

Now that sports betting is regulated by the state, gone should be the days of going across state lines or doing business with offshore sportsbooks.

Last year, GeoComply, a company that helps sportsbooks locate its bettors, shared data indicating North Carolinians made 1.75 million attempts from within the state to place bets with online sportsbooks legal in other states during the 2022-23 NFL season. The attempts came from about 166,000 individual accounts.

North Carolinians also indulged in betting with offshore sites, sportsbooks operated outside of the U.S.  They can be dangerous due to the lack of regulation and consumer protections that legal sportsbooks provide.

Legalization allows the state to better monitor sportsbooks and requires policies to assure the “financial integrity” of their operations. The state also restricts underage gambling, making sportsbooks responsible for verifying the identities of new users. North Carolina also prohibits gambling advertisements targeted to minors.

Newcomers and new vice?

BetCarolina polled North Carolinians about their interest in betting on sports. Out of 997 responses, the poll found that 81% of the state’s residents do not bet on sports.

However, 1 out of 3 residents said they were “very likely” or “likely” to bet on sports if it’s legal.

It’s not surprising that the number of sports bettors would be expected to increase with its legalization. However, the concern comes with the possibility of more people dealing with gambling addiction.

It’s happened already in states that have recently legalized sports betting. In Connecticut, Dr. Marc Potenza, a professor of psychiatry at the Yale School of Medicine, told CT Insider that the state’s Gambling Help Hotline saw a 90 percent increase in calls in 2022, just about a year after the state made sports gambling legal.

With a larger population and a larger sports market, it’s not far-fetched to expect a similar trend in North Carolina.

“Regarding the $2,000,000 allocated to treating gambling addiction, we are committed to ensuring that these funds are used effectively,” N.C. House Representative Jason Saine said. “We are working closely with the North Carolina Department of Health and Human Services to prevent, treat, and help those experiencing harm related to problem gambling.”