Before legalizing sports wagering, look at who might lose

In 2005, even after other states had chased eagerly after lottery revenue, North Carolina was still divided about getting into state-sponsored gambling.

It was symbolic of that division that it took a post-midnight, tie-breaking vote by then-Lt. Gov. Bev Perdue to send the lottery bill to thenGov. Mike Easley, who signed it. Sixteen years later, those with moral qualms about a lottery and those with doubts about whether it would provide a lasting and significant increase in overall school funding have been largely vindicated.

As a practical matter, there’s no going back. The lottery is entwined in state finances and consumer expectations. But the state can still stop what could be an even more damaging dive into state-sponsored gambling – legal sports betting.

By a vote of 26-19 on Aug. 19, the state Senate approved and sent to the House Senate Bill 688, which would allow online sports wagering in North Carolina. The bill is part of a national trend. At least 20 other states have recently legalized forms of sports betting. They acted in response to a 2018 Supreme Court decision that struck down the federal Professional and Amateur Sports Protection Act as an unlawful limit on states’ autonomy.

The proposed law would have the N.C. Lottery Commission hire and regulate sports gambling companies that would offer opportunities to bet online on professional, college, electronic and amateur sports. Only those 21 and older would be able to place bets. An 8 percent tax on the companies’ adjusted gross revenue would generate between $8 million and $24 million annually, according to the legislature’s fiscal analysis staff.

The bill includes $1 million set aside annually to help problem gamblers, but that would hardly cover the damage of the state expanding gambling, especially when betting could be as easy as a few clicks on a smartphone. As an ad for the gambling company Draft Kings put it: “First there was Vegas. Then Atlantic City. Now, your pocket.”

Charles Clotfelter, a Duke professor of economics and law, said the easy digital access will intensify the impact on those vulnerable to excessive gambling. Clotfelter, along with Philip J. Cook, wrote a book on the regressive nature of lotteries, “Selling Hope: State Lotteries in America.”

“What we learned looking at lotteries and gambling in general is that certain kinds of gambling tend to be addictive,” Clotfelter told the Editorial Board. “If it’s easy to do, it has the potential of making the people who are already prone to do it do it more. To the extent you make it convenient, you could say you’re preying on people.”

John W. Kindt, a professor emeritus of business and legal policy at the University of Illinois at Urbana-Champaign who has testified before Congress about the hazards of legalized sports betting, agrees on the risk to youth.

“Access to gambling promotes gambling addiction,” he said. “As soon as this (bill) passes you are going to see widespread kids gambling on their cell phones.”

To such concerns, backers of allowing legalized gambling in North Carolina offer a weak rationale. Their argument – echoing the argument for the lottery – comes down to: Other states are doing it and we should get our share of the revenue.

But the state isn’t taking a share of the action. It’s creating and expanding the action, a move that could have negative effects on individuals and families and the integrity of sports. Meanwhile, the justification for taking that risk – more state revenue – is unlikely to significantly improve state finances.

It’s notable that legislation of this consequence is moving with little resistance or examination in North Carolina. University leaders and researchers, athletic conferences, mental health experts and opponents of state-sponsored gambling should speak against Senate Bill 688.

Legalizing sports wagering in North Carolina won’t generate enough revenue to compensate for its potential damage. It’s a bet North Carolina can’t afford to make.