Regulators got the ball rolling on the first batch of rules to govern online sports betting sites in the Tar Heel State.
The North Carolina State Lottery Commission’s legal sports betting committee met Tuesday and voted to approve a notice of proposed rulemaking and kickstart a process to get those regulations officially on the books.
Committee members were briefed on the opening salvo of 48 regulations, which are subject to an expedited rulemaking process to ensure the commission meets the statutory deadline of June 15, 2024, for launching the mobile component of North Carolina sports betting.
While the state already has in-person wagering at three tribal casinos, online sportsbooks can only launch between early January and mid-June of next year.
“The proposed rules before you are only a preliminary portion of the extensive rules that staff will propose to the commission,” said Sterl Carpenter, the lottery’s deputy executive director of gaming compliance and sports betting, during Tuesday’s meeting. “We are talking and taking your instruction and directions and putting together a comprehensive regulatory program to open the North Carolina market with a focus on public interest, clear expectations for regulated actors, responsible gaming initiatives, and consumer protection.”
The North Carolina State Lottery Commission's sports betting committee is getting briefed on the first batch of proposed rules for online wagering. Those regulations include provisions related to the "written designation agreement" with pro sports orgs needed for licenses. pic.twitter.com/ZQzMQFFqmL
— Geoff Zochodne (@GeoffZochodne) October 17, 2023
The rules were posted on the lottery commission's website Tuesday afternoon, and public comments on them are due on or before November 1. A public hearing on the pending regulations is also scheduled for October 27, giving commissioners plenty of time to digest the feedback.
“We anticipate launching a second rulemaking package, and we anticipate bringing you the sports betting license applications,” Carpenter said Tuesday. “Importantly, this means that we remain on track to meet our statutory deadline.”
North Carolina will likely attract all of the usual sports betting sites, as the state is one of the larger by population. It is also home to a growing tech hub, which some in the sports-betting business call home.
Yet getting online sports betting-related legislation passed took time in the state. It was only in June of this year that Gov. Roy Cooper signed a mobile sports and horse racing wagering bill into law, setting the stage for a launch in 2024.
Budgeting for some late changes
That, however, was before a budget bill was passed recently containing several "technical corrections" to the rules around North Carolina sports betting that could winnow down the number of operators.
One change in the budget was to remove a 12-license cap written into the betting bill passed earlier this year and to replace that limit with a requirement for mobile wagering operators to partner with a professional sports organization. Those organizations can partner with just one bookmaker, which can also operate a brick-and-mortar betting facility for the team.
Licensing-related provisions were included in the rules unveiled on Tuesday. Regulatory staffers plan to place the new rules into a standalone manual with three chapters: one containing general provisions, another for pari-mutuel wagering on horse racing, and another for sports betting.
“Of note, applicants bear the burden of showing they are suitable for a license in the state,” Carpenter said. “Under the rule, they will need to submit complete, sworn, and timely applications for the commission staff to review. In the coming weeks, we will be presented proposed copies of the sports betting application form and ask that you review and approve these as an action item.”
The sports wagering-related chapter of the manual will also cover the rules for the agreements between operators and professional sports groups. For instance, the proposed rules say the "Written Designation Agreement" must make clear how long the term of the contract is, and that any option to renew the partnership is contingent on a sportsbook operator renewing their five-year license.
“These rules regarding written designation agreements are here in response to the new provisions included in the recently enacted state budget,” Carpenter said.
