FILED SENATE
Apr 7, 2021
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 688
SESSION 2021 PRINCIPAL CLERK
S D
SENATE BILL DRS15264-STxf-4A
Short Title: Sports Wagering. (Public)
Sponsors: Senators Perry and Lowe (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO AUTHORIZE AND REGULATE SPORTS WAGERING IN NORTH
3 CAROLINA.
4 The General Assembly of North Carolina enacts:
5 SECTION 1. Chapter 18C of the General Statutes is rewritten to add a new Article:
6 "Article 9.
7 "Sports Wagering.
8 "§ 18C-901. Definitions.
9 As used in this Article, the following definitions apply:
10 (1) Adjusted gross revenue. – Gross wagering revenue received by an interactive
11 sports wagering operator from all sports wagers authorized under this Article
12 minus all of the following with respect to that gross wagering revenue
13 received under this Article:
14 a. All cash or cash equivalents paid out as winnings to registered players.
15 b. The costs paid by an interactive sports wagering operator for any
16 personal property distributed to a registered player as a result of a
17 sports wager.
18 c. The cash value of any bonuses or promotional credits provided to
19 registered players that are then returned to an interactive sports
20 wagering operator in the form of a deposit or wager.
21 d. Uncollectible receivables, not to exceed four percent (4%) of gross
22 revenue, except that the Commission may increase that percentage
23 upon a showing that a higher amount is reasonable.
24 e. Excise tax payments on sports wagers remitted to the federal
25 government.
26 (2) Amateur sports. – A sporting competition that is not a professional sport,
27 collegiate sport, or youth sport. This term includes domestic, international,
28 and Olympic sporting competitions.
29 (3) Cash equivalent. – An asset convertible to cash for use in connection with
30 authorized sports wagering that includes all of the following:
31 a. Foreign currency and coin.
32 b. Personal checks and drafts.
33 c. Digital, crypto, and virtual currencies.
34 d. Online and mobile payment systems that support online money
35 transfers.
36 e. Credit cards and debit cards.
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General Assembly Of North Carolina Session 2021
1 f. A prepaid access instrument.
2 g. Any other form approved by the Commission.
3 (4) College sports. – An athletic or sporting competition in which at least one
4 participant is a team or contestant competing on behalf or under the
5 sponsorship of a public or private institution of post-secondary education.
6 (5) Covered services. – Any service that involves the operation, management, or
7 control of sports wagers authorized by this Article, including the development
8 or operation of the sports wagering platform and the provision of odds and
9 line information, excluding the following:
10 a. Payment processing and similar financial services.
11 b. Customer identity, age verification, and geolocation services.
12 c. Streaming or other video and data that does not include odds or line
13 information.
14 d. Telecommunications, internet service provider, and other similar
15 services not specifically designed for sports wagering.
16 e. Other goods or services not specifically designed for use in connection
17 with sports wagering.
18 (6) Electronic sports. – Any video game played competitively for spectators,
19 either in-person or via remote connection, in which success principally
20 depends upon the superior knowledge, training, experience, and adroitness of
21 the participants.
22 (7) Gross wagering revenue. – The total of all cash or cash equivalents received
23 by an interactive sports wagering operator as sports wagers authorized under
24 this Article.
25 (8) Interactive sports wagering operator. – The holder of an interactive sports
26 wagering license issued by the Commission.
27 (9) Key person. – An officer or director of an interactive sports wagering operator
28 who is directly involved in the operation, management, or control of sports
29 wagering authorized under this Article, or who exercises substantial influence
30 or control over the interactive sports wagering operator's sports wagering
31 activities.
32 (10) Official league data. – Statistics, results, outcomes, and other data relating to
33 a sporting event obtained pursuant to an agreement with the relevant sports
34 governing body or an entity expressly authorized by the relevant sports
35 governing body to provide such data.
36 (11) Professional sports. – An athletic or sporting competition involving at least
37 two competitors who receive compensation for participating in such event.
38 (12) Registered player. – An individual who has established an account with an
39 interactive sports wagering operator.
40 (13) Service provider. – A business entity that provides covered services to an
41 interactive sports wagering operator and holds a service provider license.
42 (14) Sporting event. – Professional sports, college sports, electronic sports, and
43 amateur sports, and any other event approved by the Commission.
44 (15) Sports facility. – A facility that hosts professional sports and has a minimum
45 seating capacity of 17,000 people.
46 (16) Sports governing body. – An organization headquartered in the United States
47 and proscribes final rules with respect to a sporting event and enforces the
48 code of conduct for participants therein.
49 (17) Sports wagering brand. – The names, logos, and brands that an interactive
50 sports wagering operator advertises, promotes, or otherwise holds out to the
51 public displaying its sports wagering platform.
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1 (18) Sports wagering platform. – A website, mobile application, or other
2 interactive platform accessible via the internet, mobile, wireless, or similar
3 communication technology that a registered player may use to place sports
4 wagers authorized under this Article.
5 (19) Sports wager or sports wagering. – Placing of wagers on any portion of a
6 sporting event, or on the individual performance statistics of athletes in a
7 sporting event or combination of sporting events, by any system or method of
8 wagering, that may include in-person, over the internet through websites, or
9 mobile devices. The term also includes single-game wagers, teaser wagers,
10 parlays, over-under, moneyline, pools, exchange wagering, in-game
11 wagering, in-play wagers, proposition wagers, and straight wagers.
12 (20) Tier one sports wager. – A sports wager that is determined solely by the final
13 score or final outcome of the sporting event and is placed before the sporting
14 event has begun.
15 (21) Tier two sports wager. – Any sports wager that is not a tier one sports wager.
16 (22) Tribal gaming enterprise. – The business entity established by a federally
17 recognized Indian tribe that is authorized to conduct Class III games, as
18 defined by the federal Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et
19 seq., in this State and any technology and sports wagering brand partners of
20 that business entity.
21 (23) Youth sports. – An event in which the majority of participants are under the
22 age of 18 or are competing on behalf or under the sponsorship of one or more
23 public or private preschool, elementary, middle, or secondary schools. The
24 term does not include professional sports or events that occur under the
25 sponsorship or oversight of national or international athletic bodies that are
26 not educational institutions and that include participants both over and under
27 the age of 18.
28 "§ 18C-902. Authorization of sports wagering generally.
29 (a) Notwithstanding any provision of Article 37 of Chapter 14 of the General Statutes,
30 sports wagering as authorized by this Article shall not be considered unlawful.
31 (b) Nothing in this Article shall apply to any of the following:
32 (1) Pari-mutuel sports wagering on horse racing as authorized by G.S. 14-292.2.
33 (2) Fantasy or simulated games or contests in which one or more participants
34 compete against each other and winning outcomes reflect the relative
35 knowledge and skill of the participants and are determined predominantly by
36 accumulated statistical results of the performance of individuals or athletes.
37 (c) Nothing in this Article shall authorize any of the following:
38 (1) Sports wagering involving youth sports.
39 (2) Sports wagering on the occurrence of any of the following:
40 a. Injuries.
41 b. Penalties.
42 c. The outcome of disciplinary proceedings against a participant in a
43 sporting event.
44 d. The outcome of replay reviews.
45 (3) The Commission serving as an operator of a sports wagering platform.
46 (d) Upon request and with reasonable notice, the Commission or the Department of
47 Revenue has the authority to audit any interactive sports wagering operator or its service
48 providers as related to sports wagering activities authorized under this Article.
49 (e) Any sports governing body on whose sporting events sports wagering is authorized
50 by this Article may enter into commercial agreements with interactive sports wagering operators
51 or other entities in which the sports governing body may share in the amount bet from sports
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1 wagering on sporting events of the sports governing body. A sports governing body is not
2 required to obtain a license or any other approval from the Commission to lawfully accept such
3 amounts.
4 "§ 18C-903. Reserved for future codification purposes.
5 "§ 18C-904. Interactive sports wagering license.
6 (a) It shall be unlawful for any person to offer or accept sports wagers in this State without
7 a valid interactive sports wagering license. Except as provided in G.S. 18C-928, the Commission
8 shall authorize at least 10, but not more than 12, interactive sports wagering operators to offer
9 and accept sports wagers to and from registered players on sporting events, which shall include
10 any of the following:
11 (1) Professional sports.
12 (2) College sports.
13 (3) Electronic sports.
14 (4) Amateur sports.
15 (5) Any other event approved by the Commission.
16 (b) The Commission shall review and issue sports wagering licenses to qualified
17 applicants. The applicant shall complete and submit an application on a form prescribed by the
18 Commission and a licensing fee of five hundred thousand dollars ($500,000). If the application
19 is denied, the licensing fee shall be refunded, minus any expenses the Commission incurs in
20 reviewing the application.
21 (c) The application shall set forth all of the following:
22 (1) The proposed initial business plan, including the range of contemplated types
23 and modes of sports wagering.
24 (2) The proposed measures to address age and identity verification and
25 geolocation requirements.
26 (3) The proposed internal controls that will prevent ineligible persons from
27 participating in sports wagering.
28 (4) A documented history of working to prevent compulsive gambling, including
29 training programs for its employees.
30 (5) A written information security program detailing information security
31 governance and the designation of a chief security officer or equivalent.
32 (6) The proposed sports wagering brand that the applicant plans to hold out to the
33 public displaying its sports wagering platform.
34 (7) Any personal information the Commission may deem necessary concerning
35 the applicant's key persons.
36 (8) Any other information the Commission may deem necessary.
37 (d) The Commission shall conduct a background investigation on the applicant and key
38 persons as deemed necessary by the Commission. The background investigation shall include a
39 credit history check, a tax record check, and a criminal history record check. The Commission
40 may, in its discretion, accept the results of such prior check and an affidavit that there has been
41 no change in criminal history since the prior check from an applicant or key person who has
42 submitted to a criminal history record check in this or any other state within the previous 12
43 months. The Commission may not award a license to any applicant who has been convicted, or
44 a key person of the applicant has been convicted, of a felony or any gambling offense in any state
45 or federal court of the United States within 10 years of application or renewal.
46 (e) An applicant and key person for licensure shall consent to a criminal history record
47 check. Refusal to consent to a criminal history record check may constitute grounds for the
48 Commission to deny licensure.
49 (f) The Commission shall grant or deny all applications under this section. The grounds
50 for denial of an interactive sports wagering license shall be the same as in G.S.18C-906(g). If
51 there are more qualified applicants than the number of interactive sports wagering operators
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1 authorized under subsection (a) of this section, the Commission shall select the best qualified
2 applicants taking into consideration the following factors:
3 (1) The contents of the application submitted in accordance with this section.
4 (2) The extent to which the applicant demonstrates past experience, financial
5 viability, compliance with applicable laws and regulations in other
6 jurisdictions, and success with sports wagering operations in other
7 jurisdictions.
8 (3) The extent to which the applicant is able to meet the duties of an interactive
9 sports wagering operator.
10 (4) The amount of adjusted gross revenue and associated tax revenue that an
11 applicant is projected to generate.
12 (5) Any other factors the Commission deems relevant.
13 (g) A person holding a license to engage in sports wagering, on the basis of comparable
14 licensing requirements issued to that person by a proper authority by another state or territory of
15 the United States or the District of Columbia if that jurisdiction's requirements for licensure,
16 certification, or registration are substantially equivalent to or exceed the requirements of this
17 State, and who, in the opinion of the Commissi