Bill Summary for H 347 (2023-2024)

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Summary date: 

May 24 2023

Bill Information:

View NCGA Bill Details2023-2024 Session
House Bill 347 (Public) Filed Monday, March 13, 2023
AN ACT TO AUTHORIZE AND REGULATE WAGERING ON PROFESSIONAL, COLLEGE, AND AMATEUR SPORTS AND ON HORSE RACING IN NORTH CAROLINA, AND TO AUTHORIZE LIVE HORSE RACING IN NORTH CAROLINA.
Intro. by Saine, Bell, Hawkins, Clemmons.

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Bill summary

Senate committee substitute to the 3rd edition makes the following changes.

Amends the definitions in GS 18C-901 that are applicable to Article 9, Sports Wagering, as follows. Amends the definition of covered services to no longer specify that it incudes the development or operation of the sports wagering platform and the determination of odds or line information. Changes the definition of gross wagering revenue to the total of amounts received by an interactive sports wagering operator from sports wagers less the amounts paid as winning before any deductions for expenses, fees, or taxes. Amends the definition of sports facility to include a motorsports facility that annually hosts more than one National Association for Stock Car Auto Racing national touring race (was, hosts a National Association for Stock Car Auto Racing national touring race and has a minimum seating capacity of 17,000 people). Amends the definition of sports wager or sports wagering to no longer require that the wager be placed via an interactive account.

Amends GS 18C-902 by removing the referral to GS 18C-912 regarding interactive accounts. Requires the interactive sports wagering operator to monitor and block attempts to place unauthorized sports wagers (was, monitor and block unauthorized attempts to place sports wagers). Moves into this statute the provision in GS 18C-912 that prohibited seven categories of individuals from engaging in sports wagering. Makes clarifying changes.

Amends GS 18C-904 by no longer requiring the North Carolina State Lottery Commission (Commission) to authorize at least 10 interactive sports wagering operators. Adds to the items that must be included in a sports wagering license application: (1) a documented history of job creation in this State and a plan for continued job creation in this State; (2) a documented history of capital investment in this State and a plan for continued capital investment in this State; and (3) a documented history of partnership with a sports facility, if any, and the intentions of that partnership to offer the placement of sports wagers at a place of public accommodation in accordance with Article 9. Amends the issues the Commission must consider when selecting the best qualified applicants to also include (1) the extent to which the applicant, or its affiliate, will create jobs in conjunction with sports wagering in this state; (2) the extent to which the applicant, or its affiliate, has made capital investments in this State, and the timing of such capital investments; and (3) the extent to which the applicant, or its affiliate, has a plan to open and operate a place of public accommodation in accordance with Article 9. Makes additional clarifying and technical changes.

Amends GS 18C-906 by making technical changes.

Amends GS 18C-907 by making wagering suppliers report to the Commission all criminal or disciplinary proceedings commenced against that sports wagering supplier in connection with its operations. Also requires them to report to the Commission all changes in key persons, and requires all new key persons to consent to a background investigation. Deletes similar requirements for interactive sports wagering operations.

Amends GS 18C-908 as follows. No longer refers to the tax that must be paid by licensees as a privilege tax. Allows denial of a license renewal for an interactive sports wagering operator if there is good cause that the licensee has materially not complied with the provision of Article 9 (was, good cause to believe approval of another applicant would better meet the objectives of this Article in generating revenue for the State, protecting the public interest, and otherwise satisfying the criteria for issuance and no additional licenses are available).

Amends GS 18C-910 as follows. Requires the interactive sports wagering operator and its service providers to make commercially reasonable efforts to provide for the reporting of income tax on winnings (was, income tax of registered players) were required by law. Requires operators to keep records, for three years, on each sports wager, including the identity of the individual placing the sports wager (was, including the identity of the registered player).

Amends GS 18C-912 as follows. Provides that only a registered player is allowed to establish an interactive account (was, allowed to deposit cash or cash equivalents, or to place a sports wager) with an interactive sports wagering operator. Specifies that the registered player must be allowed to deposit cash or cash equivalents into the interactive account.

Makes a clarifying change to GS 18C-918.

Amends GS 18C-922 to extend the voluntary exclusion program to also include those wanting to exclude themselves from placing pari-mutuel wagers under new Article 10.

Makes a clarifying change to GS 18C-924.

Amends GS 18C-926 as follows. Allows permanent places of public accommodation for the purpose of playing sports wagers (was, for the purpose of accessing the registered players’ interactive account) to be associated with each sports facility. Removes the requirement that all sports wagers made at a place of public accommodation be placed via an interactive account. Amends the provisions applicable to the establishment of a temporary place public accommodation at a sports facility during a professional golf tournament to define temporary as opening no more than five calendar days before the professional golf tournament and closing no later than five calendar days after the tournament (was, prohibited operating more than five days prior to the tournament or five days after the tournament). Adds that the Commission may adopt rules as necessary governing the placement of any place of public accommodation on the property of a sports facility. Makes additional clarifying changes.

Effective January 8, 2024, enacts new Article 10, Pari-Mutuel Wagering, in GS Chapter 18C, providing as follows. Sets out and defines terms as they are used in Article 10. Defines pari-mutuel wager or wagering as a form of wagering on the outcome of horse races, whether live, simulcast at a simulcast facility, or previously run, in which wagers are made on one or more horses and all wagers are pooled and held by the host of the race or the ADW licensee for distribution. Defines ADW licensee as a person or entity licensed to conduct advance deposit account wagering in this state. Makes it illegal to offer or accept advance deposit account wagers unless the person is an ADW licensee. Sets out requirements for the application for an ADW license and sets the application fee at $1 million. Requires the Commission to complete a background investigation, including a credit history check, tax record check, and criminal history record check. Prohibits awarding a license if the applicant or a person required to be disclosed on the application has been convicted of a felony or any gambling offense within 10 years of the application. Sets license duration at five years; requires applications for renewal to be submitted no later than 60 days before the current license expires. Requires the Commission to review ADW licensees annually to ensure they are acting in compliance with the Article and related rules; allows a license to be suspended or revoked for violations. Requires ADW licensees to pay an annual fee of 1% of the total pari-mutuel wagers placed by State residents accepted by the ADW licensee in the applicable year. Allows the licensee to designate whether the fee is to be paid on a fiscal or calendar year basis. Requires the proceeds of these fees to be used to offset the costs of administering Articles 9 and 10 with remaining proceeds, after payment of Commission expenses, remitted to the General Fund; allows the Commission to retain an amount reasonably necessary to cover future Commission expenses related to administration of the Articles. Allows a license to be suspended or revoked for failure to pay the annual fee.

Requires State residents who want to place pari-mutuel wagers to establish an account with an ADW licensee. Sets out four categories of individuals who are prohibited from engaging in pari-mutuel wagering and requires licensee to make commercially reasonable efforts to ensure that prohibited persons are prevented from placing a wager with the licensee. Deems any member of the Commission who is determined to have placed a pari-mutuel wager with an ADW licensee to have resigned from the Commission as of the time the wager is placed and subjects Commission employees who have made such wagers to disciplinary action. Requires an individual to be allowed to place wagers on previously run horse races when physically located at a facility conducting a live horse race in this State.

Makes it a Class 2 misdemeanor for a person to knowingly offer or engage in pari-mutuel wagering in violation of Article 10. Makes it a Class 2 misdemeanor for a person under age 21 to engage in pari-mutuel wagering. Makes it a Class G felony to knowingly attempt to suborn, collude, or conspire to include the outcome of any competition or aspect of any competition that is the subject of pari-mutuel wagering. Makes it a Class I felony for a license applicant to willfully furnish, supply, or otherwise give false information on the application. Specifies that nothing in Article 10 allows the ADW licensee to be charged with a violation without actual notice and knowledge that a person is under-age or giving false information.

Requires the Commission to adopt rules necessary to administer and enforce the provisions of Article 10. Requires the Commission to adopt rules governing the conduct of horse racing in this State. Limits play of wagers on previously run horse races to a facility conducting a live horse race in accordance with the rules adopted by the Commission. Requires the Commission, in adopting rules, to consult the State Veterinarian regarding safety of horses. Requires the Commission, when adopting rules, to provide guidance on the issuance, denial, suspension, or revocation of a license provided under Article 10, on the operation of advance deposit account wagering by ADW licensees, and on the requirements for simulcast facilities.

Amends GS 18C-114 to allow the Commission and Department of Revenue to agree to exchange any data necessary to enforce and administer Article 10.

Amends GS 14-309.3 to exempt from Article 37 of GS Chapter 14 pari-mutuel wagering.

Amends GS 16-1, voiding gaming and betting contracts, by excluding from the statute pari-mutuel wagers.

Amends proposed Article 2E of GS Chapter 105, as follows. Replaces the 14% privilege tax with an 18% tax on interactive sports wagering operators. Specifies that the tax applies to the gross wagering revenue of the interactive sports wagering operator. Allows carry forward for up to 12 months if the amount of revenue is a negative number for any month. Makes returns due monthly. Sets out record keeping requirements. Allows a refund of the tax paid on a sports wager than has been refunded.

Amends GS 105-113.128 by adding to the institutions that are to receive $300,000 annually from the tax proceeds to support collegiate athletic departments to also include Appalachian State University and East Carolina University.

Enacts new GS 14-380.5 specifying that horse racing, as authorized and regulated in accordance with Article 10 of GS Chapter 18C, is not considered a horse show for purposes of Article 51A of GS Chapter 14, Protection of Horse Shows. Effective January 8, 2024.

Requires the Commission to establish guidance to parties regulated by Article 10 of GS Chapter 18C. Provides that when adopting rules under new GS 18C-1025, the Commission must adopt rules providing guidance on the issuance, denial, suspension, or revocation of a license under Article 10 and guidance on the operation of advance deposit account wagering by ADW licensees. Allows the Commission to adopt rules before January 8, 2024, but no rule may become effective until on or after that date. Allows the Commission to accept and issue applications for licensure under Article 10 before January 8, 2024, so that licensees may begin operations on January 8, 2024. Requires the Commission to use sufficient funds from the North Carolina State Lottery Fund to cover initial operating expenses to implement Article 10.  Requires the Commission’s study to include study implementation of Article 10.

Makes conforming changes to the act’s titles.