North Carolina experienced a notable decline in gross gaming revenue (GGR) during the second full month of wagering, with May’s figures revealing a significant downturn. In May, the state reported a GGR of $63.1 million. This represents a substantial 40.1% decrease from the $105.3 million recorded in April, which marked the first complete month of betting operations following the market’s launch on March 11th.
Despite March being only a partial month of operation, with betting activities commencing midway, the revenue generated in March was $66.5 million. The May figures were 5.1% lower than this initial amount. March’s results were bolstered by the March Madness tournament, where all three major North Carolina teams—UNC, NC State, and Duke—participated, likely driving higher engagement and revenue.
The betting handle in May also reflected a downward trend, standing at $525.5 million, which is the lowest total since the market’s inception. This amount was 19.0% less than April’s handle of $648.9 million and 20.3% behind March’s $659.3 million. The payouts in May totaled $458.7 million, resulting in a hold percentage of 12.3%, a decrease from April’s 17% hold.
North Carolina has not yet disclosed the specific tax revenue derived from these activities, but digital operators are taxed at 18% of GGR. The initial months also saw substantial amounts paid out in promotions as operators aimed to establish their presence in the new market. In March, $202.6 million was spent on promotions. This figure dropped to $79.7 million in April and further decreased by 61.2% to $30.9 million in May. May’s promotional spending was only 15.3% of March’s total, indicating a significant reduction as the market began to stabilize.
The state’s revenue reports do not yet provide a breakdown by operators or sports. However, it is known that eight platforms, including major players like FanDuel and DraftKings, as well as two tribal casinos, were part of the initial launch. In North Carolina, all operators must be tethered to a tribal casino or sports venue. For instance, DraftKings has partnered with Nascar, and BetMGM has an association with the Charlotte Motor Speedway.
Looking ahead, the prospect of expanding North Carolina’s gambling market to include other verticals appears dim. Tim Moore, the Speaker of the House, expressed skepticism about introducing new forms of gambling, such as video lottery terminals (VLTs). Moore cited lingering negative sentiments from last year’s legislative session as a key barrier to such expansions. He noted that the previous discussions regarding casinos have cast a shadow over potential updates to the lottery and other gambling forms.
In conclusion, North Carolina’s betting market is still in its nascent stage, showing significant fluctuations in revenue and handle figures. The reduction in promotional spending and the challenges in expanding the market underscore the volatility and complexity of establishing a stable betting environment in the state. As the market continues to evolve, stakeholders will be closely monitoring these trends and the potential for legislative changes that could impact future growth.
