North Carolina: SB 688 Changes Tax Fees For Sports Betting Licenses
June 19, 2022
North Carolina is getting closer to enacting a sports betting bill that is set to advance the state's betting market. The bill addresses the issue of raising tax rates on the betting industry.
According to a recent report, legislators are seeking to increase potential revenue that serves to increase licensing fees and proposed tax rates. Reportedly, this bill has almost been completed and is at the last minute of passing the bill in the 2022 legislative session.
Change of license fee on SB 688
In the old version of the SB, there was a license fee for the sportsbook operator of $500,000 and a five-year renewal fee of $100,000. When the operator does not receive approval, the fee will be refunded.
The new bill would allow for consideration by the North Carolina House of Representatives to increase licensing and operating renewal costs to $1 million.
The bill changes will also increase the licensing fee for sports betting suppliers from $15,000 to $30,000. In addition, service provider license fees will be doubled from $25,000 to $50,000.
The new draft does not specify an amended tax rate but does omit a tax rate of 8 percent on gross betting income. WRAL reports that it expects the tax rate to touch 14 percent in the latest bill.
Allocation of tax revenue
Based on the allocation of tax revenues, the parties that will receive the most benefits are the North Carolina Major Events, Games, and Attractions Fund. The three parties will in total receive 50 percent of the betting tax revenue.
The North Carolina State Lottery Commission will be awarded an additional 5 percent. The Department of Health and Human Services is projected raise $1 million to help educate and treat consumers who are addicted to gambling. The rest will be included in the general state fund.
Interactive sports betting license
The bill allows 10 to 12 businesses to apply for an interactive sports betting operator license. Teams from the MLB, MLS, NBA, NFL, and NHL will play at these venues if they qualify. Similarly, some professional golf event hosts and other motorsports will be granted licenses.
Through relationships with several of the state's prominent sports franchises, it hopes to entice numerous well-known sportsbook operators to enter the North Carolina mobile market. An example is the Charlotte Hornets of the NBA with the DraftKings and the Carolina Hurricanes of the NHL who will follow a similar plan.
One step closer to the finish line
The 2022 North Carolina legislative session is coming to a finish at the end of this month, meaning there are only a few days left. The draft's measures are scheduled to be considered at a future meeting of the House Judiciary Committee.
Furthermore, it is possible that the bill will be held up in other committees before reaching the House of Representatives table. A vote by the Senate will be required if any amendments are made.
So far, Governor Roy Cooper has been a supporter of sports betting. This is a positive indication, particularly if the House and Senate can reach an agreement within the next two weeks.
Mobile sports betting firms will have to wait several months before they can start delivering their services in North Carolina. For the time being, the state only permits retail sports betting at two casinos owned by the tribe in question.