Children trade bets like they once traded baseball cards. A sharp rise in personal financial problems and a sharp decline in middle-class wealth. And a state full of regrets about allowing mobile sports betting.
These are some of the arguments opponents of legalization hope will sway North Carolina lawmakers ahead of Tuesday’s expected vote on legalizing sports betting on electronic devices.
“If people understand what’s at stake, this bill could fail,” said Les Bernal, national director of Stop Predatory Gambling. “It should fail because it has no value.”
Bernal testified before a House committee last week about the possible implications of House Bill 347, North Carolina’s sports betting law. He held two briefings for interested legislators and others in the Legislature.
“If you legalize online sports betting, you will start an epidemic of child gambling across the state,” Bernal said, citing interviews with middle and high school principals. “We’ve seen that from state to state. It normalizes gambling for children.”
House Bill 347 would allow betting on pro, collegiate and other sports from mobile phones and other electronic devices from January. A similar measure fell by a single vote in the House of Representatives last year, but this year’s version is moving fast and appears to have enough support to become law.
Proponents have defeated a host of hostile amendments in committee so far in this process. The House Rules Committee will consider the bill at 11:30 a.m. Tuesday, with a plenary vote expected in the afternoon. A second vote in the House of Representatives, required because the bill affects revenue, is expected on Wednesday.
“This law will only invite a massive expansion of legalized gambling in North Carolina,” said John Rustin, president of the North Carolina Family Policy Council. “It will take advantage of North Carolina citizens to generate money for the state. The government share of what that will be compared to our total state budget will be minimal.”
North Carolina allows in-person sports betting at three tribal casinos in the state. But the legislation would allow adults who are physically in the state to place bets at any time from their phones through a licensed operator’s app or website.
About half of the federal states either have mobile sports betting or are in the process of implementing it. Some legislators in other states have expressed disappointment and some states have adjusted their regulations, tax rates and/or tax policies related to sports betting.
“It was a disaster in most states that did it, and they certainly didn’t do much to protect the public interest or the consumer interest,” said Rep. Pricey Harrison, a Guilford County Democrat and critic of the legislation.
Unlike some other states, North Carolina lawmakers have not made any outlandish claims about the amount of revenue they expect from sports betting. Governor Roy Cooper, a backer, included $85 million from sports betting in his two-year budget plan, which would cover the first 18 months of legalization.
Republican lawmakers have agreed on a spending limit of $29.7 billion for the fiscal year beginning in July.
“There is [revenue] Leakage to other states with Virginia, with Tennessee,” said Rep. Jason Saine, a Lincoln County Republican and lead sponsor of the bill. “I don’t know that we’re preventing anything. It’s all about what market they’re going to bet on?”
Mobile sports betting is legal in Virginia and Tennessee. Virginia generated $20.3 million from its 15 percent tax on adjusted gross receipts in 2021 and $49.8 million in 2022. Tennessee generated $39.3 million in 2021 and $68 million in 2022 from its 20 percent privilege tax.
North Carolina’s proposed privilege tax is 14%.
“We’re exiting our value for money,” said Rep. Abe Jones, a Wake County Democrat. “What a shame. What a bloody shame.”
It’s not the money won by the state, but the money lost by its citizens that Bernal wanted to highlight in his presentation to lawmakers. He said state data shows the revenue and two Cherokee casinos cost people $2.15 billion in the last fiscal year and is expected to total $11 billion over five years, even excluding sports betting.
“You pay even if you don’t play,” said Bernal. “You end up paying higher taxes for fewer services in the long run. … Those $11 billion in lost fortunes that’s going to happen in the next five years, who do you think is paying for their healthcare, housing, and food stamps, etc?
“We should expand the middle class. Instead, we are shrinking the middle class through these extreme forms of predatory gambling sanctioned by the state government.”
Bernal said there is no grassroots movement to bring sports betting to North Carolina, but instead gambling operators are pushing for it.
“If you don’t believe North Carolina has a sports book, you live under a rock,” said Don Waddell, general manager of the Carolina Hurricanes. “The state gets no income from it and no control. We could solve all that.”
However, critics claim that this is a poor trade-off for potential societal ills that come with more gambling. And they have no doubt that there will be more gambling in a legalized environment.
“It is inevitable that as gambling becomes more legal, the more it is promoted, the more citizens will gamble,” Rustin said.
Keith Whyte, executive director of the National Council on Problem Gambling, said his organization estimates that the risk of gambling problems increased nationwide by 30% between 2018 and 2021, with young, male online sports players accounting for most of the increase. A 2018 US Supreme Court decision opened the door for most states to legalize sports betting.
“Increase in crime, theft, embezzlement, job loss. In the home, divorce, child abuse, substance abuse and even suicide,” Rustin said. “These are the inevitable consequences of pathological and problem gambling, of gambling addiction. Hence our fundamental concern, our fundamental concern about this legislation. … We are very hopeful and, frankly, very much praying that enough lawmakers will stand against this effort.”
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