The North Carolina State Lottery Commission released the first monthly report of sports betting activity on April 16, and it’s safe to say, North Carolinians indulged in their new freedom.
The report consists of a breakdown of the money wagered, paid as winnings and earned by sportsbooks from the start of legalized sports betting on March 11 at noon to March 31.
The Lottery Commission reported a handle of $659.3 million, which is the amount of paid wagers and promotional wagers made by North Carolina’s mobile sports bettors.
Bettors won $590.7 million in amounts paid as winnings, and sports betting operators brought in just under $66.5 million in gross wagering revenue. Gross wagering revenue is the sports betting operator’s total earnings after winnings and cancelled or void wagers are deducted.
According to state law, North Carolina taxes the gross wagering revenue at 18%, meaning the state will bring in $11.9 million in tax revenue from just three weeks of legalized sports betting.
Compared to the first-month reports from other states that have legalized online sports betting, North Carolina’s numbers, for the most part, exceeded expectations.
According to Play Michigan, Michigan, a state with a similar population to North Carolina, reported a $325.5 million handle and $9.3 million in gross gaming revenue (the amount wagered minus winnings) for its first full month of legal online sports betting in February 2021 (online sports betting went live on Jan. 22, 2021).
Bet Virginia reported a $265.7 million handle for Virginia’s first full month of mobile sports betting (online sports betting went live on Jan. 21, 2021), and for Tennessee, the state reported $131.4 million in gross wagers for its first month in November 2020.
Ohio, a state with a slightly larger population than North Carolina, instead saw a larger debut in its first month in January 2023. The state reported a $1 billion handle and more than $209 million in revenue generated by sportsbooks.
Although North Carolina didn’t have the largest debut, it’s opening numbers already exceed or rival some of the most recent reports from states that have had legalized mobile sports betting for years.
It helps that North Carolina launched online sports betting right before the start of the men’s and women’s NCAA basketball tournaments, which both featured UNC, Duke and NC State.
But, how will North Carolina do in other sports seasons?
The Lottery Commission did not make any projections for the future months, but the monthly reports from other states provide a consistent look at how sports betting activity fluctuates throughout the year.
Handles and revenue tend to be at their highest from the months of September to May, and they usually take a dip from June to August. Looking at the sports calendar in the United States, the peak times for sports betting seem to align with football season, March Madness and the intersection of football, basketball and baseball in the early fall, as expected.
Yet, in the summertime when the more popular sports are in their off-seasons, less taxable revenue from a lesser amount of money wagered leads to less tax revenue for the state.
Tax rates on sportsbooks’ earnings vary in states with legalized online sports betting, but in the summer months, most of the states see tax revenue decline all in the same. For example, in June 2023, Virginia brought in $3.9 million in tax revenue, the lowest out of any month that year. By September 2023, that number jumped up to $6.7 million.
For North Carolina, it won’t be surprising if that $11.9 million in tax revenue dwindles as the summer approaches. Should the state look to supplement that drop in revenue, it shines a spotlight on the state lacking a Major League Baseball team, which could help bring in additional sports betting revenue alongside Charlotte FC in the months where football and basketball are down.
MLB Raleigh, a grassroots campaign pushing for an MLB team in the Triangle, believes that online sports betting could help the vision become reality one day.
The MLB plans on expanding to 32 teams in the near future, and at the same time the league is tapping into the sports betting business through partnerships with sportsbooks. With sportsbooks opening physical locations at MLB ballparks, MLB Raleigh sees the league prioritizing locations where sportsbooks can operate, bringing more attention to the game and more people to the ballparks as a whole.
