AN ACT TO AUTHORIZE AND REGULATE SPORTS WAGERING IN NORTH CAROLINA.
Identical to S 688, filed 4/7/21.
Adds Article 9, Sports Wagering, to GS Chapter 18C, providing as follows.
Makes sports wagering legal. Defines sports wager or sports wagering as placing of wagers on any portion of a sporting event (professional sports, college sports, electronic sports, and amateur sports as well as any other approved event), or on the individual performance statistics of athletes in a sporting event or combination of sporting events, by any system or method of wagering, that may include in-person, over the internet through websites, or mobile devices. This also includes single-game wagers, teaser wagers, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play wagers, proposition wagers, and straight wagers. Excludes: (1) pari-mutuel sports wagering on horse racing as authorized under GS 14-292.2 and (2) fantasy or simulated games or contests. Specifies that this also does not authorize: (1) wagering involving youth sports; (2) wagering on the occurrence of injuries, penalties, outcome of disciplinary proceedings against a sporting participant, or outcome of replay reviews; and (3) the Commission serving as an operator of a sports wagering platform. Gives the the North Carolina State Lottery Commission (Commission) or the Department of Revenue (DOR) authority, upon request and with notice, to audit an interactive sports wagering operator or its service providers as related to the wagering activities. Allows commercial agreements between a sports governing body on whose sporting events sports wagering is authorized and interactive sports wagering operators or other entities in which the sports governing body may share in the amount bet from sports wagering on the governing body's sporting events.
Requires a sports wagering license before offering or accepting sport wagers. Requires the Commission to authorize 10-12 interactive sports wagering operators to offer and accept wagers to and from registered players on sporting events. Sets out licensing application procedures and requirements, including paying a $500,000 licensing fee and undergoing a credit history check, tax record check, and criminal history record check. Prohibits licensure of a person who has been convicted, or a key person of the applicant has been convicted, of a felony or any gambling offense in any state or US federal court within 10 years of application or renewal. Requires the Commission to select the best qualified applicants for licensure and sets out factors that are to be considered in making the selection. Allows licensure, without further examination, of a person holding a license issued by another state having comparable licensing requirements. Requires application decisions to be made in 60 days. Sets out five categories of applicant information that will be public record, including the name of key persons, whether the application was approved or denied, and the documented history of working to prevent compulsive gambling.
Requires a service provider license before providing covered services to an interactive sports wagering operator. Defines covered services as any service involving the operation, management, or control of sports wagers authorized by this Article, including the development or operation of the sports wagering platform and the provision of odds and line information, excluding the following: payment processing and similar financial services, customer identity, age verification, geolocation services, streaming or other video and data that does not include odds or line information, telecommunications, internet service provision, and other similar services not specifically designed for sports wagering, and other goods or services not specifically designed for use in connection with sports wagering. Excludes from this license requirement an interactive sports wagering operator who provides covered services in-house. Sets out licensing application procedures and requirements, including paying a $25,000 licensing fee and undergoing a credit history check, tax record check, and criminal history record check. Requires an application decision in 60 days. Prohibits licensure of any applicant who has been convicted, or a key person of the applicant has been convicted, of a felony or any gambling offense in any state or federal US court within 10 years of application or renewal. Allows licensure, without further examination, of a person holding a license issued by another state having comparable licensing requirements. Specifies eight grounds for denying licensure. Sets out three application items that will be public record.
Licenses are valid for five years. Sets out the procedure for renewing the license, including paying a renewal fee of $100,000 for an interactive sports wagering license and $10,000 for a service provider license. Sets out grounds for denial of a renewal.
Sets out nine duties of an interactive sports wagering operator and its service providers, including: preventing persons who are not registered players from placing sports wagers through its sports wagering platform, preventing persons who are not physically located in the state from placing a wager through its sports wagering platform, establishing procedures to detect suspicious or illegal sports wagering activity, and providing for the reporting of income tax of registered players where required by applicable State or federal law. Sets out records that must be retained for three years and requires the records to be disclosed to the Commission when requested. Lists information that the interactive sports wagering operators must share with a sports governing body when the body has notified the Commission that real-time information sharing for sports wagers placed on events is necessary. Sets out requirements for the advertising of the sports wagering platform including that it not target persons under age 18. Establishes background check requirements for new employees of interactive sports wagering operators. Requires interactive sports wagering operators to use commercially reasonable methods to maintain security of wagering data, registered players and other customer data, and any other confidential information.
Requires being a registered player to deposit cash or cash equivalents, or to place a sports wager, with an interactive sports wagering operator. Sets out requirements for the registered players' interactive account and limits registered players to one interactive account with each interactive sports wagering operator. Sets out seven classes of individuals who are prohibited from engaging in sports wagering, including: a person under age 21; any Commission member, officer, or employee if placing a sports wager in this state; any employee or key person of an interactive sports wagering operator or service provider licensee when placing sports wagers with that interactive sports wagering operator; and any participant in the sporting event being bet on. Sets out conditions under which a registered player's interactive account may be suspended or terminated.
Allows a sports governing body to request in writing that the Commission restrict, limit, or exclude a certain type, form, or category of sports wagering with respect to the body's sporting events, if the body believes that the type, form, or category of sports wagering may undermine the the sporting event's or body's integrity. Requires the request to be granted upon demonstration of good cause that the wagering is likely to undermine the body's or event's integrity. Sets out additional guidelines governing this process. Requires the Commission and interactive sports wagering operators to cooperate with investigations conducted by sports governing bodies or law enforcement agencies. Provides that interactive sports wagering operators are not required to use official league data to determine: (1) the results of tier one (a wager that is determined solely by the final score or final outcome of the sporting event and is placed before the event begins) sports wagers on sporting events of any organization whether headquartered in the United States or elsewhere or (2) the results of tier two (anything other than a tier one) sports wagers on sporting events of organizations that are not headquartered in the United States. Allows a sports governing body to notify the Commission that it wants interactive sports wagering operators to use official league data to settle tier two sports wagers on sporting events of such sports governing body; sets out the process to be followed when such a request is made.
Allows the Commission to take the following actions, after notice and hearing, when a license holder violates the Article: (1) suspend or revoke the license; and/or (2) impose a penalty of up to $10,000 for each violation.
Sets out the following criminal penalties: (1) Class 2 misdemeanor to knowingly offer or engage in sports wagering in violation of this Article or for a person under age 21 to engage in sports wagering, (2) Class G felony to knowingly attempt to influence the outcome of any competition or aspect of any competition that is the subject of sports wagering, and (3) Class I felony for any license applicant to willfully give false information on the interactive sports wagering license application.
Imposes an 8% tax on each interactive sports wagering operator's gross revenue. Requires 50% of this collected tax to be remitted to the North Carolina Major Events, Games, and Attractions Fund.
Allows individuals to voluntarily exclude themselves from placing sports wagers through a program to be established by the Commission; requires interactive sports wagering operators to use reasonable means to comply with the exclusion of individuals participating in the program. Requires the Commission to adopt rules to establish the program, subject to five specified requirements, including requiring a process by which participants can petition for removal from the program.
Requires the Commission to adopt rules that allow but do not require interactive sports wagering operators and their service providers to employ systems that offset loss or manage or lay off risk. Allows sports facility owners or operators to establish a place of public accommodation for the purpose of accessing a sports wagering platform through mobile devices, computer terminals, or similar access devices; set out requirements for the location of such accommodations.
Requires that all sports wagering authorized under this Article be initiated, received, and otherwise made within this state unless otherwise determined by the Commission. Deems the activities allowed under this Article to be conducted solely under this Article's authority, not under the federal Indian Gaming Regulatory Act. Deems a tribal gaming enterprise an interactive wagering operator upon submitting an application, paying the required fees, and entering into an agreement that contains the specified content. Specifies that a tribal gaming enterprise deemed an interactive sports wagering operator does not count towards the total number of authorized interactive sports wagering operators in this state.
Adds new Part 2L, under Article 10B of GS Chapter 143B, establishing the North Carolina Major Events, Games, and Attractions Fund (Fund). Sets out NCGA findings. Allows the Department to enter into multiparty agreements with site selection organizations and local entities to provide grants from the Fund. Sets out nine conditions to be met, including that the economic activity directly or indirectly attributable to the major event is sufficient to justify the use of State funds to attract or retain the event in this state, and that a grant is necessary to attract or retain the major event to the state. Defines a major event as an entertainment, musical, political, sporting, or theatrical event where: (1) the event is held at a sports facility or is sponsored by the specified golf associations, (2) the event is not held more often than annually, (3) the location of the event is determined by a site selection organization through a competitive process, (4) the site selection organization considered multiple sites located outside of the state, and (5) the site selection organization selected a site within this state as the sole location for the event. Sets out the process under which a local entity can apply for a grant. Requires the Department to report annually on the Fund to the specified NCGA committees and division. Requires the Department to conduct a study to determine the minimum funding level needed to successfully implement the Fund; requires reporting the study results to the specified NCGA committees and division annually. Sets out the process under which the Department, with the Governor, is to establish guidelines for the administration of the Fund, for the selection of projects, and for the disbursement of grants.
Amends GS 18C-114 by making conforming changes to the Commission's powers. Amends GS 18C-120 to make conforming changes by allowing the State Lottery Director to conduct background investigations of interactive sports wagering operators. Amends GS 143B-947 to allow the Department of Public Safety to provide the Commission and Director with criminal histories for prospective sports wagering operators or service providers; also allows fingerprints of potential interactive sports wagering operators to be forwarded to the SBI for a criminal history record search.
Includes a severability clause.
Requires the Commission to adopt temporary rules to implement the Article. Allows the Commission to accept and issue applications for licensure in accordance with the Article, with licenses becoming effective October 1, 2021. Requires selecting the applicants that will maximize revenue to the State while preserving the integrity of sports wagering and ensuring accountability and preserving the public trust in licensed sports wagering activities, if more than 12 completed applications are received. Effective when the act becomes law.
Effective October 1, 2021, unless otherwise indicated.