The North Carolina legislature asked the North Carolina Education Lottery to commission Spectrum Gaming for a report, at a cost of $425,000, researching revenue projections for sports betting, casinos, legal video poker, internet casino games, horseracing and internet lottery.
The report indicated within five years the state could expect $2.2 billion in revenue from casinos, $2.5 billion from statewide video poker, $367 million in sports betting, $300 million from internet casino games and $15 million on horseracing.
Spectrum Gaming Senior Vice President, Financial Analysis Matt Roob said, “It has been used in the past as an economic development tool. You take a look at what behavior has been like in other states.” Roob said the researchers also considered income levels and the types of gaming offered by surrounding states.
The Eastern Band of Cherokee Indians operate two Harrah’s Cherokee casinos in the western part of the state. The Catawba Indian Nation’s Two Kings Casino is under construction. The Spectrum report also said North Carolina could benefit from up to nine state-run casinos.
Roob said, “Where would be logical places to put them? Kind of like you want to go where the money is, right?” The recommended locations included three casinos in the Charlotte area, two in the Triangle and one each in Pinehurst, Wilmington, Winston-Salem and Asheville. Spectrum estimated the nine casinos with integrated hotels would cost $1.8 billion. However, by the fourth year, state tax revenue from gambling alone would cover the cost—and that doesn’t include other tax revenue generated through hotel stays, meals and income tax from the jobs created.
The revenue numbers are impressive but Roob cautioned there will be plenty of opposition to state-run gambling. He said Spectrum simply provides the information and state lawmakers, and voters, make the ultimate decision. “I understand that people don’t necessarily want this in their neighborhood, but that’s why there’s a legislative process. You want to know: Is this an industry we want in our state? How do people feel about it and what sorts of revenue and employment can we get?”
Now that legislators have the report, Roob advised them to act fast since surrounding states are ahead in terms of sports betting. Legislation approving sports betting at the Cherokees’ tribal casinos was approved in April 2019 and became legal in July 2019. The state reached a gaming compact with the tribe in time for them to open sportsbooks for March Madness.
The Spectrum report indicates the state would offer sports betting terminals in convenience stores and sports bars—up to 5,000 machines across the state within five years. However, Roob said using mobile phones to make bets is critical. Without mobile or online betting, the drop in revenue would be “huge,” he said. However, online and mobile sports betting is illegal under current state law. “Does the state legislature want that? Do you want everyone having a sports book in their pocket?” Roob said.
Observers said a sports betting bill is expected to be filed in the near future, including selling licenses to private companies to offer online betting apps with state regulation.
