South Carolina to Reignite Efforts for Online Sports Betting Legislation

South Carolina is poised to reignite efforts to legalize online sports betting as the General Assembly prepares to reconvene in January. Despite recent setbacks and new studies highlighting the potential social costs of gambling, advocates are determined to push forward with legislation that could significantly alter the state’s gaming landscape.

Renewed Legislative Push Amid Growing Interest

The drive to legalize online sports betting in South Carolina has gained momentum, primarily fueled by the success seen in neighboring states. Since the U.S. Supreme Court lifted the federal ban on sports betting in 2017, 38 states have legalized the practice, collectively generating over $2.5 billion in taxes from $11 billion in industry revenue last year.

One of the most compelling motivators for South Carolina lawmakers is the staggering revenue generated by North Carolina’s newly implemented online sports betting law. In the first five months of legalization, North Carolina has already seen substantial financial returns, with state officials initially estimating $64 million in revenue for the first year.

“The success in of the tax revenue generated already in North Carolina will be enticing,” said Stephen Shapiro, an expert from the University of South Carolina’s Department of Sport and Entertainment Management, in an August 19 interview.“I would imagine that we’re going to see more of those types of sports betting bills and that there’s a good chance it would be legalized in the next couple years.”

North Carolina’s Lucrative Betting Market

When North Carolina legalized online sports betting in March, it was anticipated to significantly boost the state’s economy. Governor Roy Cooper underscored this potential when he placed a ceremonial first bet on the Carolina Hurricanes to win the Stanley Cup, remarking, “The legalization of sports betting will provide a significant boost to North Carolina’s economy and will allow our thriving sports industry to continue to grow.”

North Carolina’s expectations have been exceeded, with over $1 billion wagered in the first 60 days alone. By July 1, the state had already generated more than $50 million in taxes and fees, nearly 80% of the projected annual revenue. This rapid financial success is likely to exert additional pressure on South Carolina legislators to follow suit, particularly as the state has struggled to similar legislation in recent years.

South Carolina’s journey toward legalizing online sports betting began in earnest during the 2022 gubernatorial race when Democratic candidate Joe Cunningham championed the cause. Cunningham argued that illegal sports betting was already widespread in the state, with no benefit to South Carolina’s coffers.

“Sports betting is happening in South Carolina. It’s just under the table, unregulated, and overseen by bookies. Our state gets nothing,” Cunningham said. “It’s time to legalize sports betting, bring it to the surface, and use the new tax revenue to cut taxes and invest in our teachers and roads.”

Despite Cunningham’s defeat to Republican Governor Henry McMaster, his advocacy sparked a conversation that led to the introduction of two bipartisan bills in the subsequent legislative session. The first bill, sponsored by S.C. Rep. Russell Ott, D-Calhoun, aimed to legalize online gambling on horse races, primarily to the state’s struggling equestrian industry. Ott, who is now running for state Senate, stressed the need for South Carolina to keep pace with other states that had already ed similar legislation.

Ott’s bill ed the S.C. House with a 56-46 vote but ultimately stalled in the Senate.

A more comprehensive bill, introduced by Rep. Chris Murphy, R-Dorchester, with backing from the powerful Ways and Means Committee Chair Bruce Bannister, R-Greenville, proposed online sports betting on both professional and college sports. This legislation was projected to generate at least $20 million annually, with 80% of the revenue directed to the state’s General Fund. Murphy emphasized the importance of addressing the estimated $2.5 billion wagered illegally online in South Carolina each year, but like Ott’s bill, it failed to in the Senate.

New Studies Highlight Potential Risks

As South Carolina considers a renewed push for online sports betting, two recent studies have brought to light the potential social costs associated with gambling. A study from the University of California San Diego’s Rady School of Management found that while online gambling has been a financial boon for state budgets, it also correlates with increased financial distress among lower-income residents.

“Our data show that online gambling legalization leads to more irresponsible gambling spending among lower-income consumers,” said study co-author Kenneth Wilbur.

Another study by researchers from the University of Southern California and UCLA found that states that legalized online betting experienced a significant rise in bankruptcies, collections actions, and a decline in credit scores. Study co-author Brett Hollenbeck expressed concern over the findings, noting that while some residents enjoy online gambling responsibly, a small but significant portion could face serious financial difficulties.

Source:

”South Carolina to see new push to legalize online sports betting”, statehoeport.com, August 23, 2024.