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North Carolina commercial casinos and video lottery terminals could still join sports betting as gaming legislation passed in the Tar Heel state this year.
PlayUSA has learned there are discussions to include both additional gaming expansions in the budget appropriations bill.
“I do believe that VLTs and casinos could be included in the budget,” Rep. Jason Saine told PlayUSA. “Supporters and lobbyists on those issues are continuing to meet with members.”
Saine, who sponsored sports betting legislation that passed this month, is one of the House chairs for a conference committee on HB 259, the 2023 Appropriations Act.
NC legislative leaders looking for revenue
Saine said the commercial casino and VLT language is being developed by the Senate. The revenue from gaming expansions could help offset an income tax reduction.
The Senate proposed decreasing individual income tax from 4.99% to 4.5% by 2024 and 2.49% by 2030.
Gaming revenue could help make up the difference. A gaming market analysis released by Spectrum Gaming in March made revenue projections for potential new gaming options in North Carolina.
Spectrum projected three destination resort casinos added in North Carolina could generate $1.682 billion in gross gaming revenue. The casino tax rate being discussed in North Carolina is unknown. A 35% tax rate could provide $589 million in annual state revenue.
A North Carolina VLT market limited to 30,000 machines could produce $1.89 billion annually, according to Spectrum estimates. A House bill earmarked 32% to the general fund. That’s a little more than $600 million a year. Total, authorizing casinos and VLTs has the potential to produce nearly $1.2 billion a year for state appropriations.
The state doesn’t necessarily need revenue from gaming expansions right away. North Carolina has a $3.25 billion budget surplus.
Senate President Phil Berger and House Speaker Tim Moore have both spoken about looking into casino expansion. Moore briefly said he wanted to send the sports betting bill to conference committee to discuss adding casinos and VLTs. But he backed off and let sports betting pass as a standalone bill.
North Carolina has three tribal casinos, two located in the western part of the state and one 35 miles north of Charlotte.
Virginia sparks North Carolina action on casinos
The Virginia legislature authorized casinos in 2020 and voters in four jurisdictions approved hosting a casino that November in the general election.
Two of those casinos are up and running in the neighboring state. And the Eastern Band of Cherokee Indians, which has two of North Carolina’s tribal casinos in partnership with Caesars Entertainment, once again joined with Caesars to begin building a $650 million casino in Danville, Virginia. Danville is just across the border from North Carolina.
After the Virginia casinos open, Spectrum projects that North Carolinians will cross the border to spend $259 million annually on gaming in Virginia.
North Carolina lawmakers want to keep that money within the state, which has triggered interest in authorizing commercial casinos.
But it does seem late in the session for casino legalization to suddenly emerge when no casino bill language has been made public.
Time may be right for NC regulation of VLTs
Video gaming machines already operate unregulated across North Carolina and have for years.
In pitching a VLT bill in the House Commerce Committee last month, Rep. Harry Warren estimated that between 60,000 and 100,000 machines already operate in North Carolina bars, restaurants, gas stations, truck stops and warehouses.
Warren has been working on a VLT bill for nine years. He wants to regulate a maximum of 35,000 VLTs in the state while funding enforcement to shut down unregulated machines.
“I’m anticipating that the Senate version of a VLT bill will be included in the upcoming conference report which will become our budget,” Warren told PlayUSA. “Sports betting advanced on its own, but we’re thinking some other aspects of gaming might just come up in the budget.”
Sen. Brent Jackson, one of the Senate conference committee chairs, is a proponent of VLT regulation who authored a VLT bill last year.
“We’ve been unsuccessful in putting sweepstakes parlors and VLTs out of business,” Warren said. “The reason they exist is people want to play them. So no amount of legislation is going to completely eradicate them. The common sense thing to do is regulate them so we can control it rather than try to eliminate it. I think people are coming to that understanding.”
Timing for North Carolina budget effort
Saine said the plan is for the conference committee to produce the budget agreement by the end of the month.
The budget is supposed to be in place by the July 1 start of the next fiscal year. But Berger warned last week that there’s a chance budget discussions continue into July.
We should know soon if North Carolina will make one of the broadest gaming expansions in one year by adding casinos and VLTs to sports wagering and horse betting.
