There are three things that abhor a vacuum: nature, politics and gambling demand. One topic sure to come up in the North Carolina General Assembly next year is potential gambling expansion. Rival ideas of commercial casinos, video game terminals, and the biggest of all — iGaming.
Like it or not, iGaming is already here. Legal versions of iGaming include mobile sports betting, online lottery tickets and new “digital instants,” which quickly are making at least as much as sports betting. Revenue of other states legalizing iCasino games easily doubles, or more, that of sports betting, with a vastly more diverse customer base. The path of least legal resistance in expansion is iGaming. Physical casinos guarantee conflicts with “NIMBYs” or “Not in My Backyard” opponents. Legalizing video game terminals would reward “grey machines” you see in gas stations that also sell lottery tickets. Some of those grey machines also sell vouchers to play online casino games on your smartphone. They’re called “sweepstakes” games that could also be bought directly on some mobile apps.
I bought a voucher in Henderson County, uploaded credits on my phone. Drove to Harrah’s of Cherokee, in the Qualla Boundary, where the Eastern Band of Cherokee Indians negotiated to have geofencing keep out seven otherwise legal sportsbooks from operating there, so only their Caesars’ app works. (Every sportsbook is okay with this and would likely support a similar system if iGaming was legal.)
I posted videos on my X account (@iGamingAlliance) of me showing their geofencing stops me going on FanDuel but doesn’t stop sweepstakes casino games. I could’ve played these games anywhere else. Sweepstakes don’t care about sovereign boundaries. Sweepstakes casinos and offshore sportsbooks are an inherent threat to every legal form of gaming there is, including land-based casinos and lotteries. The only value of sweepstakes is revealing how big the iGaming market really is, what we lose by pretending that iGaming isn’t already here. We are losing millions in tax revenue because of the myopia.
Despite their supporters’ imagined loopholes and multiple “currencies,” sweepstakes games are not regulated, you likely don’t know the house edge, cannot guarantee the games’ veracity from potentially other countries, could be used by children, and do not generate a single dime in taxpayer revenue. No matter what any ad on social media infers, “available in all states” does not mean “legal in all states.”
There are lawsuits in other states trying to stop sweepstakes. They are such a threat that federally recognized tribes in California, who won a bitter and expensive campaign against sportsbooks trying to legalize sports betting, that the two sides are joining forces to fight sweepstakes. As the saying goes, “War is war, but business is business.” Yet I’d argue that legalizing only gets rid of half of the illicit market. Stores that have these machines, or other “grey machines,” should not be allowed to sell lottery tickets, and that’s just for starters. There are ways to fight back, if lawmakers stop ignoring the issue of illicit gaming and are willing to step on toes.
I suggest legalizing iGaming should not have the spigots wide open. The best way to legalize is to establish hard daily, weekly and monthly limits. The North Carolina Education Lottery’s digital instants have limits of $505 a day, $2,000 a week and $5,000 a month.
My proposal is simple on how permits are issued:
$500/$1,000/$2,000 limits for land-based casinos (tribal and commercial)$250/$500/$1,000 for sportsbooks, betting exchanges and horse betting books$100/$200/$400 for independent low stakes operators
I also suggest capping all promotional money to $100 a year per operator. I have seen $1,000 given out to new customers in New Jersey. That’s reckless, would easily cause addiction. Maybe it’s also time for a uniform age for all forms of gaming, including lotteries.
But before we talk anything else, the NCGA should immediately join the non-partisan National Council of Legislators from Gaming States (NCLGS.org). It’s “Gambling Governance 101.” States should work together on all forms of gaming and not tempt Congress.
In 2025, state lawmakers can work out a rational compromise for all interests, or pretend lobbying money equals wisdom, at the detriment to taxpayers. 90% of something is better than 100% of nothing.
Dennis Justice lives in Fletcher
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