North Carolina Sports Betting Expansion Attracts Industry Giants

North Carolina flag

North Carolina flag

The State Lottery Commission of North Carolina recently revealed the list of businesses competing for retail and online sports betting licenses, marking a major step towards welcoming the state’s expanding sports betting industry. Seven significant companies, including industry titans DraftKings and FanDuel in sports betting, entered the race for the agency’s “recommended submission” by the deadline of December 27.

Renowned American sports betting companies DraftKings and FanDuel have emerged as front-runners in the applications for North Carolina’s new gaming environment. This change marks a departure from the current system that was restricted to tribal casinos and comes after the state’s legislature approved commercial sports gambling in June.

Regulatory Review Process

Entrusted with supervising the recently extended gaming industry in the state, the North Carolina State Lottery Commission announced its intention to carefully examine applications for online sports betting. Before granting licenses, the regulatory authority projects a thorough review period of up to 90 days. Sports betting businesses must start on June 15, 2024, according to state law. Governor Roy Cooper, however, stated that he would prefer sportsbooks to open for business in time for March Madness, especially the NCAA Division I men’s basketball championship in 2024.

The sports betting laws in North Carolina require businesses applying for sportsbook licenses to either form a connection with a professional sports team or venue, or meet the requirements by being affiliated with reputable sports leagues such as the PGA Tour and NASCAR. Notably, FanDuel has established a partnership with the PGA Tour, Fanatics partnered with the NHL Carolina Hurricanes, and Bet365 joined the NBA’s Charlotte Hornets in the bidding process.

The other three candidates, who have not yet revealed their professional sports partners, could work with the Carolina Panthers of the NFL, the North Carolina Courage of the National Women’s Soccer League, or regional motorsports organizations like Charlotte Motor Speedway and NASCAR.

Financial Implications and Collegiate Athletics Support

Each sportsbook license, a key entry ticket into North Carolina’s burgeoning market, comes at a price – a substantial one-time fee of $1 million. Furthermore, these operators will be subject to an 18% tax on their gross revenue. In an interesting twist, the state plans to allocate a significant portion of the tax proceeds to support collegiate athletics at thirteen state universities. Schools such as Appalachian State University, University of North Carolina at Charlotte, and Winston-Salem State University stand to benefit, receiving annual funding of up to $300,000.

Caesars Sportsbook and Tribal Dynamics

The market leader Caesars Sportsbook is prepared to submit an application to become a licensed service provider within the field of commercial sportsbook competitors. The Eastern Band of Cherokee Indians, who own Harrah’s Cherokee Casino Resort and Harrah’s Cherokee Valley River, are the proprietors of this property, and their action is in line with their pledge to run an online book. Governor Cooper’s readiness to change the state’s Class III gaming agreement to allow online sports betting, though, is a necessary condition for this endeavor.

The Catawba Indian Nation owns the temporary Catawba Two Kings Casino, adding to the already extensive tribal casino scene in North Carolina. The relationships that are developing between commercial and tribal interests complicate the landscape of sports betting.

Challenges to Market Dominance: Underdog and Competitors Emerge

While DraftKings and FanDuel have long led the sports betting industry in the United States, a new wave of rivals is preparing to take on the long-standing market leaders, including Underdog Sports, ESPN Bet, BetMGM, and others. Underdog Sports, a newcomer to the daily fantasy sports and sportsbook market, has shown its intention to expand across state lines by obtaining its first online sports betting license in Ohio.

A significant $1.5 billion investment is needed for ESPN Bet, a strategic initiative by Penn Entertainment, in order to capitalize on the renowned sports media brand and enter the profitable sports betting market. Along with BetMGM, these up-and-coming companies see 2024 as a critical year to significantly chip away at the market share held by DraftKings and FanDuel.

Author: Eugene Gray