Posted on: January 1, 2024, 12:01h.
Last updated on: January 1, 2024, 12:14h.
The North Carolina State Lottery Commission last week unveiled the list of companies that applied to receive retail and online sports betting privileges ahead of the agency’s “recommended submission” deadline of Dec. 27.
Sports betting market leaders DraftKings and FanDuel highlight the group of seven that additionally includes BetMGM, ESPN Bet, Fanatics, bet365, and Underdog Sports. State lawmakers and Gov. Roy Cooper (D) legalized commercial sports gambling last June.
The North Carolina State Lottery Commission, which is tasked with licensing and regulating the state’s newly expanded gaming industry, says it’ll need up to 90 days to review the online sports betting applications and issue licenses.
The law requires that such betting commence by June 15, 2024. But Cooper wants sportsbooks to begin taking bets in time for March Madness — the 2024 NCAA Division I men’s basketball tournament.
North Carolina is home to arguably the biggest rivalry in college basketball, with the North Carolina Tar Heels and Duke Blue Devils blood enemies. The programs are respectively ranked No. 9 and No. 16 in the AP Top 25 poll. The blueblood programs are near perennial bracket entries.
North Carolina’s sports betting law requires sportsbook companies to partner with a professional sports team, venue, or one of two qualifying sports organizations — the PGA Tour and NASCAR.
FanDuel is partnered with the PGA Tour. Fanatics’ application is in conjunction with the NHL Carolina Hurricanes, while ESPN Bet is aligned with Quail Hollow Club, an annual stop on the PGA Tour that hosts the Wells Fargo Championship. Bet365 is bidding with the NBA Charlotte Hornets.
The three remaining applicants did not publicly disclose their professional sports partners. Potential partners include the NFL Carolina Panthers, National Women’s Soccer League’s North Carolina Courage, Charlotte Motor Speedway, and NASCAR.
If approved, sportsbook firms will be allowed to operate in-person and online sports betting. Their retail facilities will only be permitted at the host stadium or venue of their partnered organization.
Each sportsbook license costs a one-time $1 million fee. Gross revenue will be subject to an 18% tax. The state will appropriate much of the tax benefit to support collegiate athletics at state universities. Thirteen schools will receive up to $300,000 annually from the gaming expansion:
- Appalachian State University
- East Carolina University
- Elizabeth City State University
- Fayetteville State University
- North Carolina Agricultural & Technical State University
- North Carolina Central University
- University of North Carolina at Asheville
- University of North Carolina at Charlotte
- University of North Carolina at Greensboro
- University of North Carolina at Pembroke
- University of North Carolina at Wilmington
- Western Carolina University
- Winston-Salem State University
Along with the seven commercial sportsbook bids, Caesars Sportsbook is expected to apply as a licensed service provider to operate an online book on behalf of the Eastern Band of Cherokee Indians. Caesars operates the tribe’s two casinos in North Carolina — Harrah’s Cherokee Casino Resort and Harrah’s Cherokee Valley River.
For the tribe to gain online sports betting rights, Cooper must agree to amend the state’s Class III gaming compact to allow such gambling. The state is home to a third tribal casino in Kings Mountain called Catawba Two Kings Casino. The temporary casino is owned by the Catawba Indian Nation.
Can Underdogs Compete?
DraftKings and FanDuel dominate the U.S. sports betting landscape, with estimates suggesting they control as much as 75% of the industry. Their control led to a market consolidation last year, as many upstarts folded, including Fox Bet, WynnBet, and MaximBet.
Underdog is a new daily fantasy sports and sportsbook startup from Jeremy Levine, who cofounded the StarStreet and DRAFT fantasy apps that were acquired, respectively, by DraftKings and Paddy Power Betfair. Underdog recently gained its first online sports betting license via Ohio.
Underdog and the others bidding in North Carolina believe 2024 could be the year when smaller sportsbooks begin cutting into DraftKings and FanDuel’s market share. ESPN Bet is Penn Entertainment’s $1.5 billion wager on the industry after agreeing to pay ESPN that amount to leverage the sports media brand into its sports betting business.