First Online NC Sports Betting Rules Include DFS Pick’Em Block

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NC sports betting

As regulators kicked off the online North Carolina sports betting rulemaking process, they joined the growing number of states looking to prohibit daily fantasy sports pick’em contests that mirror props.

After being created late last month, the North Carolina State Lottery Commission’s Sports Betting Advisory Committee approved its first package of proposed online NC sports betting rules Tuesday. The rules are available on the lottery’s website.

A public comment period will remain open until November 1, with a public hearing October 27. The quick turnaround comes after a surprise change to the sports betting law last month

“This keeps us on track to meet the statutory deadline,” said Sterl Carpenter, deputy executive director of gaming compliance and sports betting at the NC Lottery, about the law’s requirement to launch sports betting between January 8, 2024 and June 14, 2024.

Pick’em targeted in sports betting rules

Among the rules in the first proposed package of sports betting regulations, the NC Lottery outlined what constitutes daily fantasy sports. In the definition, DFS contests “are determined predominantly by accumulated statistical results of the performance of individuals.”

The rule also details five types of contests that are not daily fantasy sports, including those, “based on proposition wagering or contests that involve, result in, or have the effect of mimicking proposition wagering or other forms of sports wagering.”

The Coalition for Fantasy Sports, which represents PrizePicks, Underdog and Sleeper, claims North Carolina legislators promised the pick’em products would be protected when they passed sports betting law this spring:

“The legislature ensured that our contests would continue to be offered as fantasy sports when it passed its sports wagering bill just a few months ago. We are confident that the Lottery Commission will reach common sense rules that reflect the letter and spirit of that bill. We look forward to participating as stakeholders in the rulemaking process, just as we worked alongside with legislators this past session to protect the fantasy sports that North Carolinians have played for years.”

More states ruling against pick’em DFS games

The proposed North Carolina definition joins a growing number of US sports betting states taking a stance against the DFS operator pick’em contests this year.

In the past few months, Wyoming and Florida sent PrizePicks and Underdog cease and desist letters. Meanwhile, New York and Michigan altered their regulations to prohibit the pick’em games.

In Colorado, regulators require the pick’em contests to include at least four outcomes based only on fantasy point accumulations.

NC sports betting rule process

Carpenter said the NC Lottery worked with Gaming Laboratories International, or GLI, to put together the preliminary rules package. The NC Lottery partnered with GLI earlier this year.

Following the public comment deadline November 1, a detailed presentation will be prepared for the Sports Betting Advisory Committee on or around November 14. There are 48 proposed rules in the package, including general provisions and licensing provisions.

Carpenter also anticipates a second rulemaking package next month, as well as a draft of sports betting applications. He did not go in-depth into the rules during Tuesday’s meeting, instead pointing to their posting on the website.

NC sports betting structure change

In his overview, he highlighted the market’s license structure. Last month, North Carolina legislators included a change to the online sports betting framework when they approved the state budget.

The change requires online operators to partner with a professional sports team or organization in the state. Now, there are at least 11 teams and organizations that qualify for licenses.

Previously, the law allowed up to 12 untethered licenses. Operators could partner with teams for in-person sportsbooks and would receive preferential treatment in the application process.

Slower going in Tar Heel State

North Carolina lawmakers originally approved sports betting legislation this spring, with Gov. Roy Cooper signing it into law in June. The NC Lottery released a to-do list in June and hired Carpenter in August.

Kentucky, which also approved sports betting this spring, launched last month.

There is in-person sports betting at three tribal casinos in North Carolina.