Mobile sports betting is set to go online in North Carolina in barely three weeks, and the anticipation continues to build as natives of the Tar Heel State prepare to place bets on their favorite teams, or to see how the new business venture helps spur the state economy.
North Carolina is one of the last few states to legalize online wagering, so we have a number of different examples on hand that can help us predict exactly how the pastime will impact the state economy. Here’s a look at what to expect in these exciting times.
Established Economic Trends
Every state performs differently in the sports gambling market because of a number of socioeconomic and even political factors: it’s hard to forecast exactly how North Carolina will perform once North Carolina sports betting sites begin operation, but I’ll do my best to forecast it.
The first factor we’ll look at is population. The Tar Heel State is the ninth most populous state in the country as of the 2020 census, with 10.44 million people calling it home. Georgia is the closest to it in terms of total population, but the Peach State still hasn’t legalized sports betting yet, so we’ll have to cast the net a bit wider. Ohio, Michigan and New Jersey are the next closest states by population, and here’s a look at how they performed in their first full years of operation.
In Ohio, sports bettors placed more than $7.6 billion in wagers in 2023 when they first went online; New Jersey saw more than $4.5 billion in bets placed, while Michigan logged $3.9 billion in theirs.
Economic impact on the state is a bit different than those numbers, as there are two different tax formulas to take into account for each state: the personal income tax rate levied against the people who win bets, and the gross gaming revenue tax that sportsbooks have to pay when they come out as winners. Altogether, sportsbooks in states around the same size as North Carolina bring in roughly $1 billion per year in net revenue.
What Do the Numbers Really Mean?
Of course, there are a number of extenuating circumstances we have to keep in mind.
New Jersey was the first state to legalize mobile sports betting—besides Nevada, obviously—so their numbers might be a bit lower than they otherwise would have been. As the first state to the party in the current rush of gambling legalizations, there wasn’t enough time for the frenzy around sports betting to build up. Instead, they were the trailblazers.
At the same time, though, New Jersey also benefited from out of state traffic: rather than having to travel to Vegas to place bets, bettors on the East Coast could cut down on their travel time and hit up Atlantic City instead. That interstate commerce bonus falls into a lull over time as more states continue to legalize the pastime—New York, the fourth most populous state in the country, legalizing sports betting put a significant debt in their New Jersey neighbors’ revenue—but North Carolina also holds the benefit of being close to the Deep South. Traditionally socially conservative states like South Carolina, Georgia, Alabama and Texas have all remained firm in their opposition to legal sports betting, so cities like Charlotte could see tourism tick up as people come to visit those bets.
Revenue Figures
The North Carolina General Assembly’s Fiscal Research Division predicts that in the first full year of operation, the Tar Heel State will pull in $64.6 million in tax revenue stemming from the gambling industry.
When looking at the numbers, though, it could end up reaching much higher.
Of the roughly $1 billion we can expect the sportsbooks to pull in, 18 percent (or some $180 million) of that will go to North Carolina. People in North Carolina are taxed at a flat 5.25 percent rate regardless of their income, so we can expect another eight figure payday for the state from that area if mobile betting catches on quickly.
Of course, the economic benefit reaches much farther than the wagers placed. Tourism is set to get a boost as people come to make use of a new state’s worth of deposit matches, risk free bets and other gambling promos, and spending on room and board will give the state another economic shot in the arm: even the people who don’t have anything to do with the gambling industry at face value are sure to see their revenue increase because of legalization.
Similarly, the state budget provisions for gambling revenue to be devoted toward youth and collegiate sports programs (among a number of other causes), both of which will help boost the quality of life for North Carolina residents.
