Senators bet on sports gambling to fund NC school construction

A group of state senators are betting that sports gambling could be their answer to funding school construction.

On Wednesday morning, Sens. Jim Perry, a Kinston Republican, and Paul Lowe, a Winston-Salem Democrat, filed Senate Bill 688. If passed, it would authorize sports gambling on professional, college, electronic and amateur sports or any other events approved by the NC Education Lottery Commission.

The lottery commission’s profits go to education. Under the bill, the commission would collect an 8% tax on the monthly adjusted gross revenue of gambling companies, sending half of the revenue to a fund that would promote job growth and economic development.

“I’m in a poor area,” Perry told The News & Observer Wednesday. “I have two Tier 1 counties and while I’m thankful for the money available through the lottery — they’ll let you forgo five years of your lottery funds to get some advance money, so to speak, to help with your schools — but that’s still not enough.”

Tier 1 counties are the state’s most economically distressed areas.

“What COVID has done is showed us how much disparity we really have,” Lowe added.

Perry said he and Lowe sat down to dinner one night talking about how to help schools. He said that someone had brought them projections for how much money schools could gain through this legislation.

Perry said a reasonable projection shows that sports gambling, overseen by the lottery commission, could bring in $50 million a year, half of what the lottery already brings in from playing.

The bill recommends charging a $500,000 licensing fee, Perry said. Renewal fees would cost $100,000 for interactive sports wagering licenses and $10,000 for a service provider license.

The commission would be authorized to give out at least 10 licenses, but no more than 12.

“Look, until someone else brings me some ideas about how to help provide more funding for school construction in rural areas, then I’m looking at every idea,” Perry said.

Lowe said he and Perry came to the conclusion that people are gambling illegally as it is but the state doesn’t reap any tax benefit from it without this bill.

“They are choosing to spend their money in this manner,” Perry said.

“We believe every sheriff knows who the bookies are in their county,” he said. “We see this going on and we see folks avoiding income taxes on money from illegal gambling.”

Perry said instead of ignoring illegal gambling legislators should open up conversations about how the state can benefit from legal gambling. He said this bill allows adults to freely choose to gamble, and collects money for schools without forcing taxes on other people.

The 17-page bill includes strict guidelines on everything from who can bet, what they can bet on, how a person can run a sports gambling operation in North Carolina and how to prevent compulsive gambling.

Gambling on youth sports would continue to be illegal, as would gambling on injuries, penalties, the outcome of sports disciplinary proceedings or the outcome of replay reviews.

Proxy gambling, with someone betting on behalf of someone else, would be outlawed.

The bill would not affect fantasy sports gambling, Perry said.

Supreme Court allowed for legal sports gambling

This isn’t the first time that lawmakers have proposed sports gambling in North Carolina.

The Supreme Court ruled in 2018 that state lawmakers could decide whether to allow sports gambling.

In 2019, lawmakers passed Senate Bill 154 that allowed sports gambling on tribal land. North Carolina has two casinos owned by the Eastern Band of Cherokee Indians.

Former NBA Commissioner David Stern has said allowing states to regulate sports gambling risked letting people take advantage of college athletes.

Earlier, North Carolina athletic director Bubba Cunningham told The News & Observer that UNC is against betting on college sports.

Perry said he had reviewed surveys of North Carolina residents and 70% believed the lottery commission should look at other gaming options to raise money for the state.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it on Pandora, Spotify, Apple Podcasts, Stitcher, iHeartRadio, Amazon Music, Megaphone or wherever you get your podcasts.

This story was originally published April 7, 2021 at 3:56 PM with the headline "Senators bet on sports gambling to fund NC school construction."