By L.A. Williams
Christian Action League
June 15, 2022
With under two weeks to go in the N.C. Legislature’s short session, a bill that would authorize online sports gambling hasn’t moved since November, but supporters are betting a deal is in the works. And organizations and individuals standing up for family values are sounding the alarm.
Introduced last year, the 17-page bill would welcome up to a dozen online gambling companies into the state, each of which would pay a $500,000 initial licensing fee, a $100,000 renewal fee and turn over 8 percent of their adjusted gambling profits to the state to be split between the General Fund and a kitty used to attract major sports events. In addition to allowing betting on sports events online and via mobile devices, the bill would allow for professional sports organizations in the state (Carolina Panthers, Charlotte Hornets, Carolina Hurricanes and Charlotte Motor Speedway) to set up lounges for betting, and would even open the door for colleges to get involved.
The proposed legislation, SB 688, passed the Senate in August, received a favorable report from the House Committee on Commerce in November and is now in the hands of the Committee on the Judiciary.
“Numerous studies have proven human cost of predatory gambling and gambling addiction, including increases in divorce, alcoholism, drug addiction, abuse, job loss, personal bankruptcy, and suicide,” the North Carolina Family Policy Council warned in a recent alert issued to its supporters urging them to ask their state representatives to vote the bill down.
The Christian Action League has stood firmly against the expansion of gambling in any form. And this week, attorney Paul Stam, former House Speaker Pro-Tempore who retired from the Legislature in 2016, penned a letter to friends pointing out a host of problems with the bill and warning that it will corrupt sports, bankrupt many bettors and hurt families.
“Putting the state in the business of endorsing more gambling and enticing citizens to foolishly part with their money to no productive end will result in addiction or desperate behavior for some,” he wrote. “Some will not be able to pay their just debts. Bankruptcy, poverty, crime and inadequate child support will follow, as night follows the day.”
Stam, who keeps a finger on the pulse of legislation, says bill sponsors are trying to push it through with no amendments even though as written, it is in violation of the state Constitution. He said the urgency may have something to do with shifting opinion, as revealed by a recent poll. A WRAL news poll released in April showed that 52 percent of respondents said sports gambling, including online gambling, should be legalized in the state. But a more recent survey showed that more respondents (48 percent) oppose legalization of online sports betting than support it (45 percent).
In his letter, Stam said the provision in the bill that calls for the Lottery Commission to “prevent persons from placing sports wagers as agents or proxies for others” is unrealistic in that the Commission has failed to do this with the lottery. He called the fund to attract major sports events “another slush fund/pork barrel to once again try to pick winners and losers” and said that free enterprise advocates would not agree to such a scheme.
Perhaps most importantly, Stam pointed out that the proposed legislation runs afoul of the state Constitution, according to a March 4 opinion issued by the North Carolina Institute of Constitutional Law.
“What is the reason to limit vendors to 10 to 12 who each pay a $500,000 ‘fee’ to obtain a license and renew it every five years for another $100,000?” Stam demanded. “A license for a service provider costs $25,000 and a supplier license costs $15,000. These are called ‘barriers to entry.’ It is a monopolistic practice which is forbidden by Article 1 (Declaration of Rights) Section 34 of our Constitution: ‘Perpetuities and monopolies are contrary to the genius of a free state and shall not be allowed.’”
“Unfortunately, as currently written, SB 688 (“An Act to Authorize and Regulate Sports Wagering in North Carolina.”) would violate this provision in the State Constitution and should not be enacted as written,” reads the NCICL memorandum. “… SB 688 would not only restrict healthy and beneficial horizontal competition … but it effectively eliminates it by imposing a shockingly low cap on the number of available licenses. This type of restriction or elimination of competition is ‘the evil which the anti-monopoly provision seeks to prevent.’”
According to sports betting product and media company Action, lobbyists and industry analysts believe a behind-the-scenes agreement may lead to even larger “barriers of entry” in the bill. Action says the bill could incorporate a tax rate as high as 16 percent instead of 8 percent and that the five-year operator license fee could double, from $500,000 to $1 million.
Read Stam’s letter by clicking here
The Rev. Mark Creech, executive director of the Christian Action League, is not surprised that the gambling industry is betting on the bill to pass, despite the fact that is unconstitutional.
“This is a corrupt industry,” Creech said. “As I have said many times before, this is financial fraud being perpetrated on North Carolinians. Our lawmakers should see it as such and vote against this bill.”