Online Horse Racing Wagering Arrives in the Tar Heel State

In a recent report, the North Carolina Lottery Commission informed legislators of its plans to regulate sports betting, including horse racing, in the state.

When mobile sports betting begins in the state on March 11, eight authorized operators may take bets from adults. Counting the District of Columbia, North Carolina will bring the total number of states that permit mobile sports betting to thirty. Account creation is now open to users.

The legislation in North Carolina, however, permits more than sports betting on mobile devices. It also legalized in-person sportsbooks at certain sports venues and pari-mutuel betting on horse races. The commission was mandated by law to provide an additional report to the Joint Legislative Oversight Committee no later than March 1. 

Legal Online Horse Racing Betting in North Carolina

The commission announced its intention to conduct more rule-making regarding pari-mutuel wagering and horse racing later this year. The timeframe was not explicitly stated. Pari-mutuel wagering is a betting system in which all the money is combined into a common pool, and the total amount of successful bets made determines the payment.

The North Carolina Commission identified the state’s license cost as a potential barrier for pari-mutuel operators to enter the market. The charge is $1 million for a five-year term, equivalent to $200,000 annually. It is far more than any other region in the United States. New York now imposes the highest licensing charge in the nation, amounting to $20,000 per year. Given the recent developments, the probability of any operator entering the market with a licensing fee ten times higher than that in New York is highly improbable. Considering these developments, it’s logical to anticipate a surge in initiatives like North Carolina betting promos as operators look for ways to attract and engage a tentative market.

They also said a possible solution to this issue would be to let an advance deposit wagering (ADW) operator collaborate with a sports wagering provider. However, this would most likely need a legislative modification. 

What about in-person betting in NC? 

According to the legislation, operators are permitted to establish “two permanent places of public accommodation,” with one situated on the premises of a sports facility and the other within a half-mile distance from the sports facility.

According to the commission, only one operator-applicant explicitly stated in its application that it intends to run a facility accessible to the public.

Don Waddell, the president and general manager of the Carolina Hurricanes, said in a prior interview with WRAL that the team aims to establish a physical facility and has selected Fanatics Sportsbook as its partner due to their readiness to run an in-person sportsbook.

The Hurricanes are contemplating holding the event either inside PNC Arena or at the newly acquired Backyard Bistro. The restaurant is unlikely to have the capacity to meet all the security, monitoring, and other compliance requirements imposed by the commission.

The commission inquired if eligible Places of Accommodation might choose a less stringent set of compliance criteria if they decide not to have a complete sportsbook and instead run a restricted number of kiosks.

The Commission staff is now assessing the request, as stated in their written communication. 

North Carolina Fantasy Gaming Update

At the beginning of creating rules, the commission suggested that fantasy pick them competitions, where players compete against the house rather than other users, should be classified as sports gambling.

Companies in that industry, such as Underdog Fantasy, strongly opposed the regulation, so the commission decided not to implement it. Instead, the commission said that it would observe the steps taken by other states.

Underdog has just terminated its fantasy pick them competitions in North Carolina. It is one of the eight authorized sports betting providers.

Other jurisdictions have started to take strict measures against fantasy pick them tournaments, which often include a series of statistical prop bets for specific players. 

The commission’s report states that it closely observes the regulatory actions in other gaming jurisdictions. These actions include enforcement measures, lawsuits, and rulemaking efforts to address unauthorized sports wagers being marketed under different names. Activities taken in these comparable jurisdictions may provide valuable insights for shaping Commission policy, guiding the activities of enforcement agencies, and influencing the priorities of parliamentarians.