Bill Summary for H 347 (2023-2024)
|View NCGA Bill Details||2023-2024 Session|
AN ACT TO AUTHORIZE AND REGULATE WAGERING ON PROFESSIONAL, COLLEGE, AND AMATEUR SPORTS AND ON HORSE RACING IN NORTH4 CAROLINA, AND TO AUTHORIZE LIVE HORSE RACING IN NORTH CAROLINA.Intro. by Saine, Bell, Hawkins, Clemmons.
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Enacts new Article 9, Sports Wagering, in GS Chapter 18C, providing as follows. Sets out and defines terms as they are used in the Article. Defines sports wager or sports wagering as the placing of wagers via an interactive account on any of the following: (1) a sporting event, (2) a portion of a sporting event, (3) the individual performance statistics of athletes in a sporting event or combination of sporting events, or (4) a parimutuel wager. Specifies that the term includes single-game wagers, teaser wagers, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play wagers, proposition wagers, straight wagers, and any other wager approved by the North Carolina State Lottery Commission (Commission). Defines parimutuel wager as a betting system in which all of the bets of a particular type are placed together in a pool and the sports wager is placed against other bettors placing sports wagers on the same event of horse racing, dog racing, or other sporting events in which the participants finish in a ranked order. Defines a sports wagering platform as a website, mobile application, or other interactive platform accessible via the Internet, mobile, wireless, or similar communication technology that a registered player may use to place sports wagers authorized under this Article.
Legalizes sports wagering, including parimutuel wagering. Requires sports wagering to be placed via an interactive account (a mobile account established by a registered player for the purpose of placing sports wagers) and initiated and received within this State except as provided in GS 18C-928 (described below, concerning Indian tribe gaming). Requires an interactive sports wagering to: (1) ensure that the registered player is located within the State, and not present on Indian lands within the State, when placing any sports wager, using geofencing and (2) monitor and block unauthorized attempts to place sports wagers. Specifically excludes from this Article interactive sports wagering conducted exclusively on Indian lands by an Indian tribe operating in accordance with a Tribal-State gaming compact and authorized to conduct Class III gaming under a compact with the State. Prohibits a licensed sports wagering operator from accepting a wager if the registered player placing the wager is physically present on Indian lands when the wager is initiated and received; requires using geofencing to ensure compliance. Also prohibits: (1) sports wagering involving youth sports; (2) sports wagering on injuries, penalties, the outcome of a disciplinary proceeding against an event participant; and (3) the Commission serving as an operator of a sports wagering platform. Also excludes from the Article fantasy or simulated games or contests in which more than one fantasy contest player competes against each other and winning outcomes reflect the relative knowledge and skill of the fantasy contest players and are determined predominantly by accumulated statistical results of the performance of individuals. Gives the Commission and the Department of Revenue (DOR) authority to audit any interactive sports wagering operator or its service providers as related to sports wagering activities authorized under this Article. Allows any sports governing body on whose sporting events sports wagering is authorized to enter into commercial agreements with interactive sports wagering operators or other entities in which the sports governing body may share in the amount bet from sports wagering on sporting events of the sports governing body; specifies that a sports governing body is not required to obtain a license or any other Commission approval to lawfully accept such amounts. Defines a sports governing body as an organization headquartered in the United States that prescribes final rules with respect to a sporting event and enforces the code of conduct for participants therein; for electronic sports, the sports governing body is the video game publisher of the title used in the electronic sports competition, regardless of location. Specifies that the Commission is not authorized to establish, require, or enforce a maximum or minimum payout or hold percentage upon any interactive sports wagering operator.
Requires obtaining an interactive sports wagering license before offering or accepting sports wagers. Requires the Commission to authorize at least 10 but not more than 12 interactive sports wagering operators to offer and accept sport wagers to and from registered players on sporting events, which include professional sports, college sports, electronic sports, amateur sports, and any other event approved by the Commission. Requires license applicants to submit an application and a $1 million licensing fee to the Commission; requires the fee to be refunded if the application is denied, minus expenses. Sets out items that must be included in the application. Requires the Commission to conduct a background investigation on the applicant and key persons as deemed necessary by the Commission, which will include a credit history check, a tax record check, and a criminal history record check. Prohibits awarding a license if an applicant or a key person of the applicant has been convicted of a felony or any gambling offense in any state or federal court within 10 years of application or renewal. Refusal by an applicant or key person to consent to the criminal history record check may constitute grounds to deny licensure. Allows denial of an interactive sports wagering license for the same reasons listed for denying a valid service provider license (discussed below). Provides that if there are more qualified applications than the number of authorized operators, then the Commission must select the best qualified applicants, taking into consideration the five listed factors. Allows licensing a person who holds a license issued by another US state or territory, or the District of Columbia, if the specified requirements are met, without any further examination. Also allows the Commission to accept another jurisdiction's or approved third party's testing of the interactive sports wagering platform as evidence that the sports wagering platform meets any of the Commission’s requirements. Requires the Commission to review and issue interactive sports wagering licenses to qualified applicants within 60 days of receiving a completed application; allows extending this period if the background check is outstanding. Denials must be in writing and state the grounds for denial. Limits which applicant information is considered a public record. Requires an interactive sports wagering operator to promptly report: (1) all criminal or disciplinary proceedings commenced against the operator in connection with its operations to the Commission and (2) all changes in key persons, with new key persons required to consent to a background check. Prohibits transferring a license without approval. Requires interactive sports wagering operators to maintain a reserve of the greater than no less than $500,000 or the amount required to cover the outstanding liabilities for sports wagers accepted by the interactive sports wagering operator. Sets out the allowable forms the reserve may take. Requires the reserve to be adequate to pay winning sports wagers to sports bettors when due; presumes this requirement is met if the operator maintains, on a daily basis, a minimum reserve in an amount at least equal to the average daily minimum reserve, calculated on a monthly basis, for the corresponding month in the previous year.
Requires a license to provide covered services to an interactive sports wagering operator; excludes an interactive sports wagering operator providing covered services inhouse. Defines covered services as any service creating sports wagering markets and determination of sports wager outcomes that involves the operation, management, or control of sports wagers authorized by this Article, including the development or operation of the sports wagering platform and the determination of odds or line information; sets out items specifically excluded from the term. Requires the Commission to review and issue service provider licenses to qualified applicants within 60 days of receipt of a completed application; allows extending this period if the background check is outstanding. Requires denials to be in writing and to state the grounds for denial. Requires applicants to submit the application form and a $50,000 licensing fee. Sets out information that must be included in the application. Requires the Commission to conduct a background investigation on the applicant and key persons as deemed necessary by the Commission, which will include a credit history check, a tax record check, and a criminal history record check. Prohibits awarding a license if an applicant or a key person of the applicant has been convicted of a felony or any gambling offense in any state or federal court within 10 years of application or renewal. Refusal by an applicant or key person to consent to the criminal history record check may constitute grounds to deny licensure. Allows licensing a person who holds a license issued by another US state or territory, or the District of Columbia, if the specified requirements are met, without any further examination. Grounds for denial of a license may include: (1) the applicant is unable to satisfy the Article’s requirements; (2) the applicant or any key persons are not of good character, honesty or integrity; (3) the applicant's or any key person's prior activities, criminal record, reputation, or associations indicate a potential threat to the public interest, impede the regulation of sports wagering, or promote unfair or illegal activities in the conduct of sports wagering; (4) the applicant or a key person knowingly makes a false statement of material fact or deliberately fails to disclose information requested by the Commission; (5) the applicant or a key person knowingly fails to comply with the Article’s provisions or any requirements of the Commission; (6) the applicant or a key person was convicted of a felony, a crime of moral turpitude, or any criminal offense involving dishonesty or breach of trust within the 10 years prior to the submission date of the application; (7) any revocation, suspension, or denial of the applicant's or key person's license, certification, or registration to conduct sports wagering, other forms of gambling activity, or a covered service issued by any other jurisdiction; or (8) the applicant has defaulted on any obligation or debt owed to this State. Limits which applicant information is considered a public record. Requires a service provider to promptly report: (1) all criminal or disciplinary proceedings commenced against the operator in connection with its operations to the Commission and (2) all changes in key persons, with new key persons required to consent to a background check. Prohibits transferring a license without approval.
Allows the Commission to issue a sports wagering supplier license to a sports wagering supplier; exempts an interactive sports wagering operator who provides covered services in-house. Defines a sports wagering supplier as a person that provides services, goods, software, or other components necessary for the creation of sports wagering markets and determination of sports wager outcomes, directly or indirectly, to any interactive sports wagering operator or service provider involved in the acceptance of sports wagers, including any of the following: providers of data feeds and odds services, Internet platform providers, risk management providers, integrity monitoring providers, and other providers of sports wagering supplier services as determined by the Commission; sets out items excluded from the term. Allows the Commission, upon request of an applicant for a sports wagering supplier license, to issue a provisional sports wagering supplier license if the applicant has submitted a completed application; sets a provisional license to expire on the date provided by the Commission. Requires license applicants to submit an application and a $30,000 licensing fee. Requires applicants to disclose the identity of: (1) the applicant's principal owners who directly own 10% or more of the applicant; (2) each holding, intermediary, or parent company that directly owns 15% or more of the applicant; (3) the applicant's board appointed CEO and CFO, or the equivalent; and (4) any other information the Commission may deem necessary. Waives disclosure of governmental created entities and investment funds or entities registered with the Securities and Exchange Commission. Specifies that a sports wagering supplier license or provisional sports wagering supplier license is sufficient to offer sports wagering services. Requires the Commission to conduct a background investigation on the applicant and key persons as deemed necessary by the Commission, which will include a credit history check, a tax record check, and a criminal history record check. Prohibits awarding a license if an applicant or a key person of the applicant has been convicted of a felony or any gambling offense in any state or federal court within 10 years of application or renewal. Refusal by an applicant or key person to consent to the criminal history record check may constitute grounds to deny licensure. Requires the Commission to review and issue licenses to qualified applicants within 60 days of receipt of a completed application; allows extending this period if the background check is outstanding Allows licensing a person who holds a license issued by another US state or territory, or the District of Columbia, if the specified requirements are met, without any further examination. Prohibits transferring the license without approval.
Sets the duration of each of the above licenses at five years. Requires licensee to submit a renewal application at least 60 days before the license expires; sets out the renewal fees. Allows the Commission to revoke or deny a license renewal for: (1) the same grounds that would constitute denial of an initial application, (2) a violation of this Article, or (3) failure to pay the privilege tax. Allows denial of an interactive sports wagering operator license if there is good cause to believe approval of another applicant would better generate revenue for the State, protect the public interest, and otherwise satisfy the criteria for issuance, and no additional licenses are available.
Requires the Commission to use tax proceeds and license fees to cover expenses of administering the Article; remaining proceeds are remitted to the General Fund.
Requires an interactive sports wagering operator and its service providers to make commercially reasonable efforts to: (1) prevent persons who are not registered players from placing sports wagers through its sports wagering platform; (2) prevent persons who are not physically located in the State from placing a wager through its sports wagering platform; (3) protect the confidential information of registered players using its sports wagering platform; (4) prevent sports wagering on prohibited events; (5) prevent persons from placing sports wagers as agents or proxies for others; (6) allow persons to voluntarily exclude themselves from placing sports wagers through its sports wagering; (7) establish procedures to detect suspicious or illegal sports wagering activity; (8) provide for the reporting of income tax of registered players where required by applicable State or federal law; and (9) prevent a participant in a sporting event, including an athlete, coach, trainer, official, or any employee or staff of a participant, from placing a sports wager on the sporting event in which the participant is participating. Requires interactive sports wagering operators to keep records for three years after a sporting event occurs, on: (1) all sports wagers, including the identity of the registered player; (2) the amount, type, time, location, and outcome of the wager, including the IP address, if available; and (3) suspicious or illegal sports wagering activity. Require disclosure of these records to the Commission upon request. Requires sports wagering platform advertisement to: (1) not target persons under 21 years old, (2) disclose the identity of the interactive sports wagering operator, (3) provide information about or links to resources related to gambling addiction and prevention, (4) not be misleading to a reasonable person. Requires licensees to conduct background checks on newly hired employees, including searching for criminal history and any charges or convictions involving corruption or manipulation of sporting events and association with organized crime. Requires interactive sports wagering operators and service providers to use commercially reasonable methods to maintain the security of wagering data, registered player and other customer data, and any other confidential information. Requires servers necessary to the placement or resolution of a sports wager, other than back-up servers, to be physically located in North Carolina. Requires interactive sports wagering operators to produce a daily summary of all sports wagering activity, detailing all transactions processed through each wagering system.
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 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 sports 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 wager 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.
Requires the Commission to establish a program under which individuals may voluntarily exclude themselves from placing sports wagers; 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. Treats the program as confidential; allows an interactive sports wagering operator conducting wagering in another state to share the information with agents and affiliates in other states for excluding individuals participating in 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.
Allows permanent places of public accommodation for the purposes of accessing the registered player’s interactive account to be associated with each sports facility. Defines a sports facility as: (1) a motorsports facility that hosts a National Association for Stock Car Auto Racing national touring race and has a minimum seating capacity of 17,000 people; (2) a facility that hosts a professional golf tournament with more than 50,000 live spectators anticipated to attend based on similar prior tournaments; or (3) a facility that is the home location of a professional sports team that competes in any of the following professional leagues: Major League Baseball, Major League Soccer, National Basketball Association, National Football League, National Hockey League, or National Women's Soccer League. Sets out further provisions governing the location of the permanent places of public accommodation, including provisions that apply to professional golf tournaments. Requires all sports wagers made at a place of public accommodation to be placed via an interactive account. Requires mobile devices, computer terminals, similar devices, and cashiers used to operate the place of public accommodation to have the ability to accept and distribute cash and cash equivalents; however, specifies that only a cashier may distribute something of monetary value to the registered player at a place of public accommodation. Allows a place of public accommodation to be advertised by the owner or operator of the sports facility.
Provides that the intermediate routing of electronic data related to intrastate sport wagering does not determine the location in which sports wagers are initiated and received. Deems activities authorized by the Article as conducted solely under the Article’s authority, not under the federal Indian Gaming Regulatory Act. Deems a tribal gaming enterprise as a licensed interactive sports wagering operator upon: (1) submission of a completed application, (2) payment of any application and renewal fees, and (3) agreement to five specified provisions by the tribal gaming enterprise. Excludes a tribal gaming enterprise deemed an interactive sports wagering operator from the total number of authorized interactive sports wagering operators.
Effective January 1, 2024.
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 of Commerce 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 NASCAR or 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. Appropriates the funds remitted to the Fund from the privilege tax on sports wagering for the grants; requires the NCGA to determine any additional amount appropriated to the Fund. 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.
Effective January 1, 2024.
Amends GS 18C-114 by making conforming changes to the Commission's powers. Adds that the Commission and Department of Revenue may agree to exchange any data necessary to enforce and administer Article 9 of GS Chapter 18C and Article 2E of GS Chapter 105, including information deemed necessary to perform an audit of a licensee or taxpayer under those Articles; makes conforming changes to GS 105-259.. Amends GS 18C-120 to make conforming changes by allowing the State Lottery Director to conduct background investigations of licensees under GS Chapter 18C and lottery contractors. Amends GS 143B-947 to allow the Department of Public Safety to provide the Commission and Director with criminal histories for licensees or prospective licensees under GS Chapter 18C; also allows fingerprints of those individuals to be forwarded to the SBI for a criminal history record search.
Enacts new GS 14-309.3 exempting sports wagering from Article 37, Lotteries, Gaming, Bingo and Raffles, of GS Chapter 14.
Makes conforming changes to GS 14-309.20, related to greyhound racing transmission or simulcasting.
Amends GS 16-1, voiding gaming and betting contracts, by excluding sports wagers placed in accordance with GS Chapter 18C.
Effective January 1, 2024.
Adds new Article 2E, Privilege Tax on Interactive Sports Wagering Operators, under GS Chapter 105, providing as follows. Imposes a 14% privilege tax on interactive sports wagering operators on the value of the privilege conferred upon the interactive sports wagering operator by the State by the granting of a license. Sets out the formula for calculating the value of the privilege conferred on the operator. Allows a carryforward of the negative amount of gross wagering revenue; prohibits carrying forward an amount more than 12 months after the month in which the amount carried forward was originally due. Sets out record keeping requirements. Allows a refund to an operator on a sports wager that has been refunded to the registered player.
Allows the Secretary of Revenue (Secretary) to require an interactive sports wagering operator to furnish a bond in an amount that adequately protects the State from an interactive sports wagering operator's failure to pay taxes due under this Article. Sets the bond amount at two times the interactive sports wagering operator's expected monthly tax liability, provided the amount of the bond may not be less than $50,000 and no more than $2 million. Requires the Secretary to periodically review the sufficiency of bonds and increase the amount of a required bond when the amount of the bond furnished no longer covers the anticipated tax liability of the interactive sports wagering operator and decrease the amount when the Secretary determines that a smaller bond amount will adequately protect the State from loss. Allows an operator to substitute an irrevocable letter of credit for the secured bond.
Requires the Secretary to distribute this tax, less the allowance to DOR and reimbursement to the Commission for administrative expenses, as follows. Allows the Secretary to retain the cost of collection up to $500,000 a year. Requires the Commission to monthly notify the Department of its expenses from administering the provisions of Article 9 of GS Chapter 18C and requires reimbursing the Commission no later than the end of the month in which DOR was notified. Requires the remainder of the net proceeds of the tax to be credited in specified amounts in the following priority: (1) Department of Health and Human Services for gambling addiction education and treatment programs; (2) North Carolina Division of Parks and Recreation for grants of $10,000 per county for the purchase of youth sports equipment and facilities upgrades; (3) support collegiate athletic departments at 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 Pembroke, and Winston-Salem State University; (4) North Carolina Outdoor Heritage Advisory Council for grants in specified amounts, in the discretion of the Council, for the following purposes: per sports team per county needing assistance to travel to in-State or out-of-state sporting events and team activities; to attract State, regional, and national sporting events, tournaments, and programs for nonprofessional athletes participating in programs administered by city, county, and local school administrative units; and use the remaining funds to support collegiate athletic departments, not to supplant general funding to that institution, at 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 Pembroke, Winston-Salem State University, and then to the North Carolina Major Events, Games, and to the General Fund.
Effective January 1, 2024, and applies to gross wagering revenue received on or after that date.
Includes a severability clause. Effective January 1, 2024.
Requires the Commission to establish guidance to parties regulated by GS Chapter 18C, addressing the application of Article 9 to electronic sports with due consideration to the key role of game publishers as creators of the underlying video game. Allows the Commission to accept and issue applications for licensure in accordance with Article 9 before January 1, 2024, in order that licensees may begin operations on January 1, 2024. Specifies that if more than 12 completed applications are received, the Commission in its discretion must select and notify the qualified applicants it determines will best serve the public interest in maximizing revenue to the State, while preserving the integrity of sports wagering and ensuring accountability and preserving the public trust in licensed sports wagering activities. Prohibits a license issued by the Commission from becoming effective prior to January 1, 2024.
Requires the Commission to use sufficient funds from the North Carolina State Lottery Fund to cover initial operating expenses of the Commission to implement Article 9, provided the total amount borrowed by the Commission must not exceed $14 million without further action by the NCGA. Requires the Commission to repay these funds within 36 months after the effective date of this act.
Requires the Commission to study the restrictions on the number of licensees and report its findings, with any legislative recommendations, to the specified NCGA committee by March 1, 2024.