North Carolina’s bill legalizing mobile sports wagering, Senate Bill 688, has been stuck in the House Committee on Judiciary since November 2021. Finally, lawmakers, led by Representative Jason Saine, have reached a new agreement on a mobile sports wagering proposal that will increase the tax rate on adjusted gross revenues and licensing fees for vendors.
Senate Bill 688
On August 19, 2021, Senate Bill 688 passed the North Carolina Senate and moved to the House. After bouncing in and out of multiple committees, the bill finally stalled in the House Committee on Judiciary in November.
It is now apparent that a key issue for lawmakers was the 8% tax rate on adjusted gross revenues and the $500,000 licensing fee, which would be subject to a $100,000 renewal fee.
Compared to other states, North Carolina’s tax rate and licensing fee are noticeably lower. Looking at North Carolina’s border states, Tennessee’s tax rate is 20%, with a $750,000 annual licensing fee. Virginia’s licensing fee is 15%, with a $250,000 3-year license fee and a $200,000 renewal fee. South Carolina has not legalized mobile sports wagering. However, South Carolina House Bill 5277 proposed a 10% tax rate on adjusted gross income (slightly different than adjusted gross revenue) and a $500,000 initial licensing fee (on par with North Carolina).
North Carolina did publish a legislative fiscal analysis with Senate Bill 688, which showed that, after a full year of operation, sports wagering could produce “total annual revenues between $8 million and $24 million.”
New Proposal
As a part of a yet-to-be-introduced new bill, lawmakers will propose a 14% tax rate and a $1 million licensing fee for 10-12 mobile sportsbooks. Thus, North Carolina could see a significant boost in revenue after a full year of operation, which the state could use a portion of to attract major events to the state, with other funds distributed for gambling addiction education and treatment programs or deposited into a general fund.
Advocates for legalizing mobile sports wagering cite new job creation and a new stream of revenue as big boosts to North Carolina. On the other hand, others are hesitant due to the potential increase in problem gambling.
Either way, until North Carolina legalizes mobile sports wagering, North Carolinians wanting to legally bet on sports will have to travel to the mountains to one of the two retail sportsbooks.
Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
