On March 11, NC sports betting went online as the Tar Heel State became the fifth in the Southeast to welcome various legal betting apps.
The legal online NC sports betting market joins neighbors Tennessee and Virginia, along with Kentucky and Maryland.
North Carolina has offered legal sports betting at several of its casinos for since 2019, though the remote locations have been in-person only for almost the entire time.
Much of the surrounding region is still far from legalizing sports betting, however, and the impact NC sports betting should have on its four border states will likely reflect those varying regulatory dynamics.
Georgia fails in 2024 legalization attempt
Georgia has been a tough nut to crack for proponents of legalized sports betting.
Despite Gov. Brian Kemp warming to it, the requisite votes GA sports betting requires as a constitutional amendment and the financial implications of a potential ballot initiative have made getting a proposal to his desk difficult. Beyond that, political turbulence over unrelated issues continues to unsettle sports wagering.
There was some progress in 2024, evidenced by the Senate’s approval of the latest proposal. However, no bill has ever passed in the House, and now that we’ve passed the legislative deadline, Georgia sports betting will wait another year.
Another legal NC sports betting border state
Perhaps a successful North Carolina launch could help future legislative pushes. In the meantime, North Carolina should benefit from Georgians crossing over state lines to bet.
There were more than 3.4 million attempts to use a sports betting app in Georgia last year, according to GeoComply, which uses technology to geofence users from betting apps in states where they are not legal. There are also more than 290,000 sports betting accounts with Georgia addresses, according to GeoComply.
Despite the state’s legislative purgatory, the appetite for sports betting is only growing in Georgia, where there were 87% more attempts to use a sports betting app during the recent Super Bowl than there were last year, according to GeoComply.
Georgia would be sixth-largest OSB state
Should Georgia pass sports betting someday, it would become the sixth–largest state by population with an online market. Ohio, which has a similar population size, saw $7.6 billion of bets in its first year, the sixth-most among all states.
While estimates are scant on how much Georgians would bet, gaming proponents have projected anywhere the state stands to add between $30 million to $100 million in tax revenue from a 20% tax on sports betting.
To put that in context, LSR anticipates $65 million in first-year tax revenue from North Carolina, which taxes at a similar 18% rate.
South Carolina on the sidelines
South Carolina‘s sports betting hopes portend even less of a chance than Georgia’s.
Gov. Henry McMaster, a staunch opponent of gambling, has long stood in the way of South Carolina joining the ranks of sports betting states. The roadblock he poses may be part of the reason various proposals to legalize have all died in the committee stage.
A sports betting proposal modeled after North Carolina and Tennessee is currently pending in a House subcommittee, though McMaster was recently reelected and his current term runs through 2026.
A much closer place to bet legally
South Carolina represents more of an opportunity for NC sports betting operators to create new customers from out of state given that, unlike Georgia, it had not previously bordered a state with legalized online sports betting.
South Carolina should naturally account for more bettors traveling into North Carolina, given the proximity some of its higher populated areas have to the border and large cities like Charlotte or Wilmington.
Rock Hill, for example, is South Carolina’s fifth–largest city and sits less than a half-hour drive from the North Carolina border. The ride from Greenville, the state’s sixth–largest city is about twice as long.
It is tough to quantify the number of South Carolinians that NC sports betting will draw, as GeoComply does not monitor South Carolina. However, LSR projects North Carolina could see about $7 billion in handle in its first year, which could make it a top-five spot in the country.
South Carolina market compares to Colorado
South Carolina is the 23rd-largest state by population. That is not far off from Colorado, which took $5.5 billion in bets last year, the ninth–highest among all states. That translated to $27 million in taxes, from a 10% rate, the same rate in the pending South Carolina bill.
Based on that rate, legislative fiscal analysts estimate sports betting could bring South Carolina between $19.7 million and $22.5 million in revenue in its first full year.
Tennessee and its unique market
Tennessee sports betting has been live with 11 apps since November 2020. One of the few states with legal online betting but without any physical sportsbooks, it has benefitted from being the first state to legalize betting in the region.
Of states the 18 states with legal sports betting markets at least two years or older, Tennessee saw the sixth–highest handle growth year-over-year in 2023, with handle growing 11.5% to $4.29 billion. That is more than double the 4.7% the average older market grew by and came despite a change in the state taxing handle as opposed to revenue.
Georgia can still outgrow NC sports betting hit
Part of that growth has come as the appetite to bet has grown particularly in its illegal neighboring states.
Nearly 1.5 million of the 3.3 million Georgia geolocation attempts tracked by GeoComply last year were attempting to use Tennessee apps. Nearly 4,000 of the 290,000 accounts with Georgia addresses were tracked moving over state lines to Tennessee in 2023.
North Carolina will undoubtedly steal some of those bettors, though not a huge pocket of Georgia’s population comes from the border it shares with North Carolina. The three largest Georgia cities in that region – Clayton, Cornelia and Toccoa – combine for less than 16,000 people.
By comparison, the largest Georgia cities to border Tennessee – Calhoun, Dalton and Rome – have a combined population of roughly 90,000.
Loss of NC sports betting cohorts unlikely to hurt Tennessee
While Tennessee will draw fewer commuters from North Carolina, the impact is expected to be more significant for Virginia, given its proximity to the Triangle and Triad region.
Tennessee’s considerable size and limited dependence on North Carolina suggest that the effects of the March 11 launch are unlikely to resemble how a state like New Hampshire was impacted by Massachusetts last year.
Shortly after Massachusetts launched sports betting in March, New Hampshire handle fell over 32% in one month. It would go on to finish the year with 8% less in bets.
Tennessee is home to about five times as many people and 10 more betting apps than New Hampshire.
Virginia sits in a sweet spot
Virginia launched legal sports betting in January 2021 and has quickly risen towards the top end of states in market size, despite a tax change that lowered its promo output.
The only state on this list with both legal retail and online sports betting markets, Virginia has benefited from North Carolinians crossing the border to place bets on their phones more than Tennessee has because of a larger border and proximity to larger populations.
Impact of lost NC sports betting commuters
While that could drop off once North Carolina launches, Virginia’s large market, like Tennessee’s, is well-positioned to continue growing without its neighbors crossing over to bet.
Virginia handle grew by 13.7% to $5.87 billion in 2023, the eighth–highest among 31 states with legal online sports betting. That growth was outpaced by only a handful of other markets two years or older.
Virginia benefits from North Carolina visitors coming in from the Triangle and Triad regions, though that is likely not enough people to significantly dampen the growth it has shown as a more mature market.
