The Overlook with Matt Peiken

NC Betting on Sports Gambling | Justin McGuire of Mountain Xpress

September 08, 2023 Matt Peiken Episode 85
The Overlook with Matt Peiken
NC Betting on Sports Gambling | Justin McGuire of Mountain Xpress
Show Notes Transcript

North Carolina legislators recently legalized sports betting in the state. Once enacted, that could funnel hundreds of thousands of dollars in revenue each year to the athletics programs of UNC-Asheville and Western Carolina and Appalachian State universities.

Justin McGuire, a reporter with Mountain Xpress who has covered this development, talks about the forces that led to legalization and how concerns about gambling addiction shaped it. We also talk about the broader cultural tipping point of legalized gambling in this country and what this might forecast about the development of more casinos in North Carolina.

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Matt Peiken: Was this a long lead up to this? Was this something that the legislature for many years had been considering, or was it relatively 

Justin McGuire: recent?

It had come up in previous sessions, and forgive me, I don't remember the exact dates of all of this, but I know it had passed the House in the past in a slightly different version. And, the Senate had come close to passing it, I think, and it hadn't quite got through. There was a lot of back and forth between the two houses over the last few years, but I think it got to a point where it became inevitable earlier this year.


Matt Peiken: was the impetus? No, no legislation happens without some constituency wanting something to happen. Who wanted this to happen and why? 

Justin McGuire: I think that there's a lot of background here, but the main reason that people wanted this to happen is because there was a feeling that North Carolina was losing revenue to other states that had legalized sports betting, which many of them have, including Tennessee including Virginia and places nearby.

There was a feeling, and this was a bipartisan effort, I should point out. There were Republicans and Democrats who supported it. There was a feeling that North Carolina was leaving a lot of money on the table by allowing people to bet in other states, but not here, and also, bet illegally, essentially, which is what a lot of people do.

They use these VPNs to do offshore betting and that sort of thing. Because say, your cell phone, It has a North Carolina address you couldn't previously bet using those betting apps, but there's ways of getting around that which people would do.

I was wondering 

Matt Peiken: about that because, on the surface of it with apps and, that it almost as if we're Boundary lists, I thought that people could bet 

Justin McGuire: anywhere and I think that was kind of the reason this is happening is that people realized it's happening anyway.

So why not get in on it and put that 18% tax rate on the people who do the apps and that sort of thing. So what does this 

Matt Peiken: legislation that passed? What does it actually do? What's the letter? What is now open up to North Carolina residents? 

Justin McGuire: There's going to be there's gonna be legal betting apps.

By the beginning of June of next year. The State lottery Commission is supposed to have all the details in place from what I've heard, it'll probably be before that, they have until June to get all this in place. But under the law, up to 12 betting apps can be licensed to operate in North Carolina.

So that's going to be things like fan duels, ballies, any of the big betting apps that people are familiar with. I honestly, don't know if there'll be all 12 of those spots used, but there can be up to 

Matt Peiken: 12. So it's already existing behemoths of the betting world who will be licensed to operate apps.

That's part of it. It's not as if. North Carolina entrepreneurs now have an opportunity to get in on this. 

Justin McGuire: There are going to be physical sports books as well that they're allowed. And I forget the exact number, but they are allowed around professional sports places. So for instance, where the Panthers play.

in Charlotte, where the Hornets play the Charlotte Motor Speedway. There's a couple of golf courses, one in Greensboro, one in Charlotte. Places like that are going to have the ability to create sports books either on site or nearby. Now what is it, 

Matt Peiken: explain for people what a sports book is. It's a physical facility.


Justin McGuire: it's a physical place where you can go and place a bet. Are those 

Matt Peiken: becoming? Antiquated in a sense, now that everything's online and people have things at their fingertips who's going to a sportsbook 

Justin McGuire: anymore? The idea is that they're going to be, because they're going to be near the existing places.

So people who are going to a Panthers game, for instance, might go in and place a bet for the game. They might, hey, people might go hang out there and watch a whole day of NFL games. If you ever see like a sportsbook in Vegas, that's a lot of what it is. It's huge TVs all over the place.

People go in. They sit down. So it's 

Matt Peiken: like a sports bar environment, except you can also 

Justin McGuire: bet on the games. I think it can be. Again, I don't know exactly what these ones in North Carolina will look like, and I suspect, again, some of, like the ones with the Panthers, the Hornets, might be more, might be bigger, might operate more days a year than some of the other ones around the smaller places.

I think all those details have to be worked out. Can 

Matt Peiken: you envision that there would be a sports book that would open up around McCormick Field with the Asheville Tourists? 

Justin McGuire: Under the, way the law has written, there are, I think there's eight places in the state that have the permission to do it, and none of them are west of Charlotte.


Matt Peiken: so now, why are they limiting it to twelve apps and eight physical places? Are these arbitrary numbers? Were these to satisfy critics or people who are concerned with gambling? What was the reason 

Justin McGuire: behind that? I honestly don't know if I could say the exact reason for it. In terms of the apps, there's only a limited number of apps that actually do this, so 12 actually is probably fairly high and I think they basically wanted to have the sports books around places that have high end professional sports.

Single A baseball wasn't going to get it done, but if you have NFL, you have the NBA, you've got PGA golf, you've got NASCAR, hockey in Raleigh the major league sports, that's really where they wanted to have it. And so there's a limited number of those kinds of places in the state, and there's certainly none in this part of the state.

You mentioned 

Matt Peiken: the tax. benefits. So you said North Carolina, the impetus behind this was that we were leaving money on the table, that there was money being spent and why should North Carolina benefit from this? Talk about who benefits financially and what will those benefits be or what are they projected to be by opening up sports betting to North Carolina 


Justin McGuire: About half of that money will just go to the state's general fund. So it can be used for whatever the legislature wants to use it for. The rest of it will be divided into very specific areas. There's going to be money that will go to youth sports programs. Throughout the state, and again, the exact details of that will need to be worked out, but I suspect we will have some youth programs here in Buncombe County and elsewhere in western North Carolina that will benefit from that.

Some of it goes to the state's gambling addiction services, because that's part... 

Matt Peiken: Hey, the irony 

Justin McGuire: of this is that, that's part of the way they appease the critics, because obviously one of the big criticism people have is that sports gambling can be very addictive, particularly for young men.

It tends to be young, 20 something men, late teens, who get themselves into financial difficulties, let's say. And so one of the, one of the things they did is say, okay we're going to use part of this revenue to address addiction.

So that'll be part of it. There's some of it that goes to the North Carolina, like outdoor funds, that sort of thing. I 

Matt Peiken: noticed you also had university athletic programs, and this is where the money, at least in Asheville, that UNC Asheville athletics 

Justin McGuire: would see some of this. That's a big one that they needed to do, I think, to pass this is to show people that Universities throughout the state are going to benefit from this, athletic departments specifically.

13 of the 15 state schools will get money from this annually for their athletic departments. The only ones that aren't are going to be UNC Chapel Hill and NC State, which are in the ACC and therefore get a lot of TV money. One 

Matt Peiken: of the things you mentioned in your story, which I thought of, Really interesting that of all Division I schools, athletic programs, how much money comes in, how much revenue, UNC Asheville is like very close to the bottom 

Justin McGuire: of all Division I schools.

They are. Part of that is they don't have football. That's a big, that's a huge part of that. If you don't have a football program, your budget's just not going to be one of the bigger ones. Whereas Western Carolina, 

Matt Peiken: which does have football, they 

Justin McGuire: weren't a whole lot higher. But they were twice as much, but they were still pretty low, yeah.

So yeah, both, but Western Carolina and UNC Asheville, the two in this area that will benefit. Appalachian State will as well, if you consider that in this area, it's not in our coverage area. So I didn't write about it, but each schools will get their estimating about 300, 000 a year, although it may be more than that, depending on how much comes in.

300, 000 isn't 

Matt Peiken: chump change, but is that going to be a. difference maker with these programs 

Justin McGuire: in any way. I talked to both athletic programs at both schools, Western Carolina and UNC Asheville. And they both said, Yet they're glad to have the money. They'll take it. There's it's gonna help, but none of them are gonna be able to create new programs or, build new facilities or whatever.

It's basically gonna help them keep up with the expenses they already have which tend to be fairly large for smaller programs like that, which don't have tons of TV revenue, they have a lot of things they need to pay for scholarships, they need to pay athletic, department salaries. which are state salaries, so they're on the state schedule in terms of raises and all that sort of thing.

So they've got a lot of expenses already, and so it's, a lot of it's going to be going into things that they're already paying for. I thought 

Matt Peiken: that was interesting too that your story talked about how, Nothing new is going to be created by these funds that these programs are already in debt or committed to a certain level of spending and that this just helps them fulfill that level that they didn't have the budget beforehand.

So the, all these programs are operating in a sort of deficit. 

Justin McGuire: I don't, I'm not sure if deficit would be the right word, but again TV money is a big factor for the big football programs, the big men's basketball programs, particularly, to some degree, women's basketball as well, a little bit in baseball with the ESPN money, but for the most part any sport that's outside of those sports is not going to get much in the way of TV money, particularly if you're not in a big conference.

So the schools like UNC Asheville and college. Western Carolina have to make do with ticket sales, with what they call guarantee games, which is, in other words, if UNC Asheville goes to play in Chapel Hill, the, Tar Heels will guarantee them a certain amount of money to come play them that they're going to get a certain amount of money to go to that game, and a lot of smaller programs like that have to do a lot of that sort of thing in basketball and football to get money.

So yeah, they're operating on smaller budgets and their revenue sources are not as predictable or as They're not as large as the schools and the big conferences. One of the things 

Matt Peiken: you talked about which I thought was a really great angle here was that while sports betting will be legalized That part of this program, or part of the fallout of this, is making sure that college students, and particularly athletes, are not betting.

Talk about that a little more, about what the 

Justin McGuire: concern is there. When I talk to the athletic people, the people in the athletic departments at the two schools, UNCA and WCU, that's one thing they both brought up, is that teaching, the student athletes particularly, because that's what their concern is. They don't.

Not to say they don't care about the non athletes, but that they don't come under their purview. It's against the regulations for any athlete in Division 1 or Division 2 or Division 3, any NCAA athlete to bet on sports. Regardless of whether that's a sport that is an NCAA sport or not, so they can't bet on the NBA, they can't bet on the NFL, they can't bet on MLB, they can't bet on horse racing, it's all part of the NCAA regulations, and that's not going to change, the state law doesn't change that, so one of the concerns all these places have is, let's make sure they understand that even though it's Your friends who aren't athletes maybe got that app out and they're betting on everything on an NFL Sunday.

You still can't do that. And if you do, you're going to get in trouble and you're going to lose your scholarship and all that stuff. And there's been a few kind of semi scandals already. Alabama baseball's coach had to resign. There was something at it was Iowa and Iowa State athletes got in trouble for some betting things.

So that's a big concern for these athletic departments is making sure they are educating their student athletes on what the rules are, what they can do, what they can't do. And they can't do much in the way of gambling. 

Matt Peiken: And this kind of brings up where we're at, sort of at this cultural tipping point of between the future and the inevitability of gambling versus the vestiges of yesteryear and sin taxes and give me a larger, a macro sense, of North Carolina struggle with progress in this way, in terms of opening things up for gambling, just even having lotteries available.

And things that weren't allowed because of religious conviction that would've kept gambling illegal because of social concerns. Where are we at here, was there any real pushback at this point in time from religious organizations, socially conservative organizations?

Yes. Talk about that a little bit. 

Justin McGuire: Yeah, there were, there was definitely some pushback from and forgive me, the name of the organization, I think the North Carolina Family Council or something like that. They were putting out press releases. They testified in some of the House hearings and Senate hearings and that sort of thing.

And their concerns. The way they expressed them were more about the addiction issues, the predatory nature of gambling, and that sort of thing, as opposed to purely religious. But these are socially conservative organizations you can make your own conclusions about why they objected to it.

So there was some of that, but it didn't seem to get much traction. As I said, there were plenty of Republican supporters of this bill. Including some local representatives, and there were Democratic supporters in there, as well as there were Democratic opponents.

So it was truly a bipartisan effort both ways. 

Matt Peiken: That's interesting. And do you see this as, some states, they're legalizing marijuana. Some for just medical use and some for general use. And that other states beside Nevada and New Jersey are opening up casinos. Where is North Carolina at here?

Is this part and parcel of a move toward just opening up this state toward legalized gambling writ large, where, casinos will soon open? Do you see this As on that 

Justin McGuire: track we have already, of course, some casinos in Cherokee. There's one, for instance but those are the, tribal lands that those, they're sovereign nations. Yeah. And um, so there is some of that already, whether there's going to be a push for real large scale casinos, I couldn't tell you, I don't know. But certainly I think to get your greater point, this is like the syntax aspect of life in North Carolina has certainly changed a lot, even in my memory.

The lottery is relatively recent. I forget exactly when the lottery came into place, but it's been within what, the last 15 or 20 years. So we didn't have a lottery for many years. I lived in mollify Carolina when they first got the lottery, and I lived right on the border of Charlotte.

And North Carolina didn't have one, so every Saturday, all the people would come down from Charlotte to get their lotto tickets. I think that, that was a similar situation where they said, we're leaving money on the table, because mollify Carolina's made it legal. In terms of like, what that means ultimately for marijuana and stuff.

stuff. Boy, I don't even want to venture a guess on that, but, we've seen it with alcohol where, we had dry counties around here as recently as like the 70s and 80s. And now every little town in North Carolina has five breweries. There's certainly been a change generationally in attitudes towards what we, traditionally would have called vice, I think.

And we're certainly heading in that direction. And I wouldn't be shocked to see if attitudes about marijuana within the next 20 years change considerably, but I don't know. 

Matt Peiken: And so getting back to the no boundaries element, because people can use apps from anywhere. You said they tried to block North Carolina area codes from 

Justin McGuire: being.

You can't, like I said, if I got an app right now on my phone, it wouldn't let me do it. The app itself would limit me because it's North Carolina, but there are ways, the people who know these things, there are ways of getting around that are fairly easy.

Matt Peiken: So this just knocks down those walls. You don't have to jump through hoops to do that. Exactly. 

Justin McGuire: It's the same argument for, a lot of things that I think were it's illegal, but people are doing it anyway. So we might as well make it legal and regulate it and get the money from it. Is there any sense 

Matt Peiken: of is there any projection about the money that will be now?

Coming in to the state because 

Justin McGuire: of this. There, there are some projections. I don't remember off the top of my head. Like I said, I know that they were projecting about 300,000 or so for these just for U n c Asheville to get things for these 13, for 13 state universities. And so they have projections on what they think the whole thing's gonna be, but I don't remember exactly what that the overall number was.

But it's a lot. They're projecting a lot of revenue from this. When does 

Matt Peiken: the changeover 

Justin McGuire: happen? Like I said, there's the State Lottery Commission has until June of 2024 to get all this in place. But, from what I've seen and heard, it'll probably be earlier than that, it'll probably be sometime maybe the beginning of next year.

That we'll have the apps will be available and some of these sports books will start opening and that sort of thing. 

Matt Peiken: Is there anything about your reporting around this that we haven't talked about or anything looking forward that people should keep their eye on around this? One 

Justin McGuire: of the things I did have a little sidebar in this story about one of the issues we've touched on a little bit, which is Gambling addiction, because that's one of the things I was interested in, because I know it has become an issue.

My son's in college. He's not a gambler, but a lot of his friends are. And he sees that a lot of them spend a lot of money on these apps and that sort of thing. And they were doing this in North Carolina before it was legal, by the way. That tells you how easy this is for people who really want to get, want to figure out how to do it.

But that was one of my concerns. And I talked to a counselor here in Asheville who specializes in addictions, including gambling addiction, and he had actually dealt with that as a young person when he was in college, that he had become very very addicted to gambling and had, had caused some problems with his family and financially and that sort of thing.

That's one of the things that does concern me personally. He's, he, his view on it was, yes, it is a concern, but like we've talked about already, people are already doing it, so he doesn't necessarily feel like making it legal is going to necessarily change that. He thinks it was already a problem, and he thinks the people who are going, who are prone to this sort of addiction were finding ways to do it anyway.

Matt Peiken: betting seen as particularly addictive compared to other forms of gambling? 

Justin McGuire: I don't know that it is because he would play poker and stuff too. So he was doing gambling on sports betting, but he would also doing other kinds of things. So I think it's all kind of part and parcel.


Matt Peiken: what I was wondering. That's why I asked about the casino thing because, I don't know if they have that, this in North Carolina, but off track betting or racetrack betting, and you can go in there and bet on more than just the horse races, you can do, it operates like a sports 

Justin McGuire: book, right?

Yeah, I'm a sports guy. I'm not a gambling guy, which is part of what interested me about this. But I think for a lot of people they experience sports through The gambling, like I said, my son talks with some of his friends like on a Sunday, they'll be watching the NFL games.

It's all about what games they bet on, it's all about the little, the side bets they've done on the over and the under and the fantasy leagues, those are huge. Yeah, and fantasy's all part of this. And that's fueled a lot of it, honestly. Fantasy's it's a different kind of gambling, but it really is gambling.

There were some aspects of fantasy that were allowed even before this. 

You couldn't bet on the outcome of a game, but betting on so and so to get so many yards to help your fantasy team, I think that was allowed. I forget. I don't know all the details on that, but... 

Matt Peiken: The irony is you can bet on a UNC Asheville basketball player to score a certain number of points, but that basketball player cannot bet on 

Justin McGuire: themselves.

And that's, again, that's one of the things that... It's one of the reasons they ultimately ended up giving the money to the state universities. I talked to one state legislator who basically said, Yeah, that's you know, this was essentially a way to sweet in the bill for people who might have objections Okay, this the college in your district is gonna get some money this way.

Yeah, it was some of this 

Matt Peiken: you know the payouts around youth sports and You know supplementing college athletics was this to mollify any objections 

Justin McGuire: 100%? Yes. I mean that yeah all that stuff was put in there to give people Something they can go back to their constituents and say, hey, look, UNC Asheville and Western Carolina are going to benefit from this.

Your youth sports programs are going to benefit from this, our outdoor programs are going to benefit from this. I think it's all part and parcel of, any kind of legislation. You're going to, start putting things in it to get votes. And that's ultimately one of the things that happened.

And I think the college sports in particular, there were concerns about You know, I think there were people who were like it's one thing if we're going to let people bet on the NBA, but if we're going to let them bet on college sports, that's a little, that's maybe a bridge too far. And this was a way to say as college sports is in there, but the programs are going to benefit from it as well.

Matt Peiken: Wow. So eventually, I wonder if they'll start opening up betting to high school and popcorn 

Justin McGuire: or football. I am not entirely sure. That high school betting would not be allowed under this bill because there is a provision for amateur athletics, and I'm not sure how that works to be honest. 

Matt Peiken: Maybe YMCA City League flag football will 

Justin McGuire: fall into that.

If somebody's willing to take the bet, you might be able to.

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