North Carolina’s betting market faced a sharp decline in revenue for the month of May, falling short by 40.1% compared to April’s profits. This drop comes as a stark contrast to April, which marked the state’s first full month of active betting following the launch on March 11. The month of May also saw a slight dip in earnings compared to March, with revenues plummeting by 5.1%, even though March only accounted for 11 days of active betting.
It’s noteworthy that March benefited from the excitement of March Madness, during which all three major North Carolina college teams—UNC, NC State, and Duke—participated, giving the newly launched market a substantial initial boost. However, without a marquee event like March Madness in May, the state’s betting handle dwindled to $525.5 million, marking the lowest total yet. This figure was notably 19.0% lower than April’s handle of $648.9 million and 20.3% behind March’s $659.3 million.
Payouts to bettors in May totaled $458.7 million, resulting in a hold percentage of 12.3%. This was a drop from April’s hold percentage of 17%. The state has not yet disclosed the amount of tax revenue collected, but it’s known that digital operators in North Carolina are subjected to an 18% tax on gross gaming revenue (GGR).
The initial fervor among operators to attract new customers led to considerable promotional spending in March, amounting to $202.6 million.
. However, this figure experienced a significant decline in subsequent months, falling to $79.7 million in April and dropping even further to $30.9 million in May. The May promotional total was merely 15.3% of March’s promotional expenditures, indicating a substantial scale-back in operator promotional activities.
North Carolina’s betting market does not currently provide a breakdown of revenue by individual operators or specific sports, but eight platforms were active at the market’s launch. Among these were prominent names like FanDuel and DraftKings, as well as two tribal casinos.
All operators in North Carolina’s betting market are required to be linked with either a tribal casino or a sports venue. For example, DraftKings has formed a partnership with NASCAR, and BetMGM has teamed up with the Charlotte Motor Speedway. These partnerships illustrate how companies are weaving their operations into the local sports and gaming fabric.
Despite the launch of online sports betting, the introduction of other forms of gambling in North Carolina appears unlikely in the near future. Tim Moore, Speaker of the House, expressed a pessimistic view on the matter in a recent interview with CBS 17. He indicated that lingering negative sentiments from last year’s legislative session are likely to stymie any efforts to introduce other gambling forms, such as video lottery terminals (VLTs).
Moore specifically stated, “I do think that the conversation last year as it related to casinos has put a shadow over the discussion about updates to the lottery with VLTs and so forth.” This statement reflects the broader hesitation to expand the gambling landscape in North Carolina beyond its current parameters.
The decline in revenue and the slow decrease in promotional spending might imply that the initial hype surrounding the launch of sports betting in North Carolina has begun to level off. The absence of significant sporting events like March Madness in the upcoming months could pose additional challenges for operators looking to sustain their revenue streams.
Furthermore, the existing requirement for operators to be tethered to a physical location might limit some flexibility and growth opportunities compared to states that have more liberal online betting regulations.
In conclusion, North Carolina’s betting market has experienced a substantial decline in revenue during May, presenting a cautionary tale for other states considering similar ventures. Although the initial launch was buoyed by significant events and aggressive promotional strategies, maintaining momentum beyond the initial excitement might prove difficult without further regulatory changes and additional gambling options.
