EBCI welcomes new sports wagering law: Law will increase competition, but allow mobile betting

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EBCI welcomes new sports wagering law: Law will increase competition, but allow mobile betting

Casino employees stand ready to take the first bets at The Book in Cherokee in March 2021. Harrah’s Cherokee photo

When sports wagering started in Cherokee two years ago, the Eastern Band of Cherokee Indians’ two casinos were the only places in North Carolina where such wagers were legal.

A bill that Gov. Roy Cooper signed into law June 14 opens the door to legalized sports wagering statewide — but EBCI Principal Chief Richard Sneed said the tribe welcomes the change.

Previously, bets had to be placed on site at the casino. Under the new law, tribal casinos will be able to accept bets placed online, anywhere in the state.

“Many of the surrounding states have already taken steps to allow mobile sports betting, and we are pleased that this bipartisan law is putting North Carolina on an equal footing,” Sneed said.

The bill passed the Senate, 37-11, on June 1, then 69-44 in the House June 7. In neither vote was there a clear split in opinion between Democrats and Republicans — members of both parties voted both for and against the bill.

In a press release, Cooper said the new law will “help North Carolina compete, make sure taxpayers receive a share, create many good-paying jobs and foster strong economic opportunity,” though he added that he hopes that in the future more of the revenue will go toward schools.

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Rep. Mike Clampitt (R-Swain), represents a district that includes the Qualla Boundary and was a co-sponsor of the bill. His support stems from his belief that people should have the right to participate in sports wagering if they desire to, or to abstain if they don’t. He conferred with the EBCI prior to supporting the bill, he said.

“It just allows another opportunity for those people that want to take advantage of entertainment by way of betting on sports and whatnot,” he said. “I’ll say that’s their prerogative, like anything else.”

The law

The law allows the N.C. State Lottery Commission to issue licenses to as many as 12 sports wagering operators, which could accept wagers on sporting events including professional, college, electronic and amateur sports. No wagers would be allowed on the occurrence of injuries or penalties, or on the outcome of replay reviews and disciplinary proceedings against a player. Bettors must be at least 21.

Under the law, applicants would submit a detailed application to the Commission, along with a $1 million licensing fee — the Commission would return all but 5% should the application be denied. Licenses will be good for five years.

The same law also lays out a licensing process to accept bets for horse races. This license also carries a fee of $1 million, with the holder required to pay 1% of total wagers placed to the N.C. State Lottery Commission.

The Commission will use revenues resulting from the sports wagering and horse racing program to cover its own expenses. Any additional proceeds from sports wagering will go into a newly created N.C. Major Events, Games and Attractions Fund, which will provide grants to encourage major events to take place in North Carolina.

Meanwhile, proceeds from the 18% tax that will be charged to sports betting operators will be used in a variety of ways. Each of 13 schools within the University of North Carolina System, including Western Carolina University, will receive $300,000 annually for their athletic departments. The N.C. Department of Health and Human Services will get $2 million for gambling addiction education and treatment programs, while N.C. Amateur Sports and the N.C. Outdoor Heritage Advisory Council will each get $1 million.

If any money is left over, 20% will be distributed evenly among the 13 schools’ athletic programs and 30% will go to the newly created N.C. Major Events, Games and Attractions Fund. The remaining 50% will go to the state’s General Fund.

While the law limits the number of licenses to 12, that number does not include any license that may be offered to the EBCI. A tribal gaming enterprise “shall” be deemed a licensed sports wagering operator after completing a set of administrative steps and agreements, the law says; this license won’t count toward the total number of authorized licenses.

“The EBCI convened a group years ago to begin this effort in earnest and has maintained the conversations to get this over the finish line,” Sneed said. “Any impact to the casino will be mitigated by our expected returns when we exercise the license guaranteed to the tribe.”

Eye on competition

Kelci Coker, spokesperson for Harrah’s Cherokee, said it’s too early to predict how the new law might impact revenues at Harrah’s but said that its current sports betting set-up has been successful thus far. Revenues are in line with projections, she said, and are highest during the football season.

The EBCI isn’t the only federally recognized tribe that could receive a license under the new law. The Catawba Two Kings Casino in Kings Mountain, which opened a temporary facility in July 2021, launched an on-site sportsbook in September and plans to offer a mobile app as the legislation takes effect, said spokesperson Glen White.

Competition has been a constant worry for EBCI leaders in recent years as nearby states have loosened gaming restrictions.

The Catawba casino, located just 2.5 hours from Cherokee, currently has 1,000 gaming machines at its temporary facility. “Thousands” of people visit monthly, White said, listing the Charlotte metropolitan area, the entire eastern and central North Carolina region and South Carolina as significant contributors. Infrastructure work is “well underway” on two “key projects” needed to start developing the permanent facility, White said. A timeline for casino construction has yet to be determined.

Bristol, Virginia, is about the same distance away from Cherokee as Kings Mountain is, and a new casino is operating there, as well. Bristol Casino — Future Home of Hard Rock opened a temporary facility with more than 900 slots, 29 table games, two restaurants, a bar and a sportsbook in July 2022. Since then, it has attracted 1.2 million visitors and made $155 million in revenue. A permanent facility is expected to open next summer and draw about 4,000 people each day, said spokesperson Keeli Parkey.

The competition does not appear to be having a significant impact yet on proceeds at Harrah’s, which drew 4 million people in 2022 and has already logged 3.3 million visitors in 2023. While the most recent June per capita distribution — a payment issued to every tribal member using half of casino profits for that time period — is about $200 less than the payment issued in June 2022, the last two payments combined are about $1,300 more than the previous two combined.

However, tribal government has long been preparing for the day when these nearby casino projects do deliver a punch, forming multiple LLCs in an attempt to diversify its income. One of these LLCs, EBCI Holdings, is focused specifically on gaming ventures outside tribal lands. It’s a 49% partner on a $55 million horse racing project in Kentucky, owns the casino enterprise at Caesars Southern Indiana Casino and is a 49.5% partner on a $650 million casino project in Danville, Virginia. Danville is about 3.5 hours from Bristol and 4.5 hours from Cherokee.

A temporary casino in Danville that opened May 15 boasting 1,000 machines is “performing well,” said EBCI Holdings CEO Scott Barber. The permanent facility is on target to open by the end of 2024.

N.C.’s new sports betting law is written to allow the tribe itself to apply for a license without needing the LLC as an intermediary, Barber said, but EBCI Holdings stands ready to assist if necessary.

“If for some reason that doesn’t happen that way once the state establishes its rules and regulations, then I think EBCI Holdings would take a more prominent role,” he said.

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