NC General Assembly poised to clear sports wagering bill

The bipartisan and controversial sports and horse wagering bill is one vote away from clearing the N.C. General Assembly after the state House agreed Tuesday to major changes made by the Senate.

House Bill 347, titled "Sports Wagering/Horse Racing Wagering," was passed by a 67-42 vote on second reading with 27 Republicans and 15 Democrats voting no.

Because the bill contains financial considerations, it requires a third vote that is likely to take place Wednesday.

Democratic Gov. Roy Cooper is expected to sign HB347 since he included sports wagering revenue in his 2023-24 budget proposal.

"The governor believes that North Carolina taxpayers should benefit from sports wagering which is already occurring, and this legislation provides a way for that to happen within the bounds of the law," said Jordan Monaghan, Cooper's deputy communications director.

"Additional work needs to be done to make sure the N.C. Lottery Commission has what it needs to set up and regulate this industry."

Most of the sports wagering legislation is set to go into effect on Jan. 8, though some become effective when HB347 becomes law.

It's unusual for one chamber to accept major changes to its initial legislation, according to legislative analysts.

"This usually happens when the margin of support for a bill is somewhat narrow in one chamber," said John Dinan, a political science professor at Wake Forest University who is a national expert on state legislatures.

"Supporters of the bill have an interest in not making additional changes that might disrupt an occasionally fragile coalition of legislators favoring a particular package that has already passed one chamber."

The bill contains several significant Senate changes, foremost including allowing pari-mutuel betting — a kind of betting used most often in horse racing, but also dog racing and jai alai.

Rep. Jason Saine, R-Lincoln, and the primary sponsor of HB347, said Tuesday that many of the Senate changes had been discussed in the House before HB347 cleared the House by a 64-45 vote on March 29.

There was no House floor debate allowed on whether to agree to the Senate changes. House speaker Tim Moore, R-Cleveland, said there could be limited debate during third reading.

HB347 cleared the Senate by a 37-11 vote June 1 with eight Republicans and three Democrats voting no.

As had been the case with previous votes on sports wagering bills, the no votes have been a mix of anti-gambling social conservatives and anti-poverty progressives.

Voting yes in the House were: Reps. Amber Baker and Kanika Brown, both D-Forsyth; Kyle Hall and Donny Lambeth, both R-Forsyth; Ashton Wheeler Clemmons, D-Guilford, and John Faircloth and Jon Hardister, both R-Guilford.

Voting no were Reps. Jeff Zenger, R-Forsyth, and Pricey Harrison, D-Guilford. Reps. Cecil Brockman and Amos Quick III, both D-Guilford, had excused absences.

Voting yes in the Senate were Paul Lowe, D-Forsyth, and Michael Garrett and Gladys Robinson, D-Guilford. Voting no was Joyce Krawiec, R-Forsyth.

A legislative staff analysis has sports wagering generating $40.6 million in annual net economic impact.

"Betting on sports in our state is occurring," said Sen. Tim Moffitt, R-Henderson. "It's increasing with access to smart phones and technology. It's about us catching up.

"In order for us to regulate it and tax it and provide a public benefit from those tax, we have to authorize it first."

The Senate version would raise from 14% to 18% a proposed tax levied on interactive sports wagering operators to provide the funding for those expenditures.

"The tax provision is certainly better, but the tax rate remains unconstitutional situational," Harrison said.

The Senate added language authorizing in-person wagering at additional public venues associated with professional sports teams and organizations.

Another change adds the Appalachian State, East Carolina and UNC Charlotte athletics programs among 14 UNC System members that would receive $300,000 in annual proceeds.

Pari-mutuel wagering is defined in the legislative analysis of HB347 as "a form of wagering in which the organizer pools all wagers placed together and pays the winners with the collected bets." Under current state law, pari-mutuel wagering on horse races is illegal in N.C. except for wagers placed at casinos operated by the Eastern Band of Cherokee Indians and the Catawba Indian Nation.

Lambeth said he doesn't think adding pari-mutuel betting could be a deal-breaker to House acceptance of Senate changes.

According to the legislative analysis, HB347 as amended by the Senate would offer two ways to place a sports wager: in-person and as a registered player online.

As with pari-mutuel wagering, the bettor must be at least age 21 and online operator would be responsible for ensuring the identity and age of any person trying to place a wager.

An online account could be funded with any of the following: cash when betting in-person; foreign currency and coin; personal checks and drafts; digital, crypto and virtual currencies; online and mobile payment systems that support online money transfers; credit cards and debit cards; prepaid access instrument; and any other form of cash or cash equivalent approved by the Lottery Commission.

According to the amendment, bettors could place their sports wagers anywhere in the state through their account.

However, interactive sports wagering operators must determine at the time the sports wager is made that the bettor is located in North Carolina, and not on tribal lands.

Bettors could also place sports wagers at a permanent or temporary place of public accommodation associated with an operator-owned sports facility, either onsite, or at approved locations within a half-mile of a motorsports facility or professional sports team, or within 1.5 miles of a sports facility associated with a professional golf tournament.

HB374 specifies that sports wagering can be allowed at the home of the Carolina Hurricanes, Carolina Panthers, Charlotte FC, Charlotte Hornets, Carolina Courage and any future Major League Baseball team.

A temporary place of public accommodation may also be established at a sports facility hosting a professional golf tournament as long as it operates only within the time period that begins five days prior to the tournament and ends five days after the tournament.

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