by
Just four or five years ago, states were seen as odd balls for having legalized sports betting. Now? It’s odd to be one of the last few states not to push for legalization.
Welp, South Carolina is one of the biggest oddities in the country in that case. Sports betting in South Carolina is still not a thing. It’s one of 12 states without a legalized betting market. However, its neighbor to the north it shares a name with does have a legalized market, and it’s climbing higher than anyone expected. Does North Carolina’s success give South Carolina an idea of what it’s missing out by not regulating this? We’d think so. Let’s dig into it!
North Carolina Posts Big September
The neighboring state went live with its market in March of this year. It’s been a whopping success, but still, we’ve truly seen it hit full stride. That’s because the true peak time for betting is in the Fall — as in right now. Football season is in full swing, but so is every other major sport like baseball, basketball, hockey, and soccer.
Welp, the North Carolina State Lottery Commission just released its numbers for September — the first time the market has been active during the NFL season. Bettors in the state wagered to the tune of $575 million. It’s not bigger than the $659 million that was gambled in March when it launched (during the NCAA Tournament), but it’s inching closer and closer.
Of this money bet, $70 million is actual take-home revenue for the state and its licensed operators — DraftKings, FanDuel, BetMGM, Bet365, Fanatics, ESPN Bet, Caesars and Underdog. The September number is the second-most for the state following March again.
But here’s the true number that South Carolina should be care about from the outside looking in: $12.6 million. That’s the amount of tax revenue the state of North Carolina collected in September from revenue. That’s the type of money South Carolina sure could use to shore up its in-state budget.
Guesstimating South Carolina’s Revenues
You can’t do a 1-to-1 comparison with the two states despite sharing a name. That wouldn’t be completely fair. North Carolina is bigger with a population of over 10 million people. South Carolina has half that with a little over 5 million folks living there. So we can half a lot of the North Carolina figures to get a feel about how much South Carolina is missing out here.
We now have seven full months data about betting in North Carolina. During that span, the total amount wagered is $3.52 billion. Sure, $392 million of that has been in the form of free-play promos but the other $3.1 billion has been from actual dollars or North Carolina residents.
But total revenue — that’s shared by the state and the operators — is just a hair under $379 million. North Carolina has a sports betting tax of 18 percent. Therefore, you can run the numbers and know they’ve made about $68 million in taxes. The number is impressive as is, but only made more impressive this is mostly from non-football season.
When it’s all said and done, North Carolina’s tax windfall should exceed $100 million this year. That’s only in 10 months too as it wasn’t live in January and February.
If you’re in South Carolina, you can conservatively say it’s betting tax potential is around the $50 million ballpark. That’s not a bad chunk of change for an operation that’s not too hard to get set up and maintain. But depending on how it’s set up, the market could be even bigger as we’ll explain.
Tax Fees Could Separate South Carolina
Here’s the thing: South Carolina doesn’t have to follow North Carolina’s blueprint to betting. No, no, one sure fire way to make sports betting in South Carolina more lucrative is to change the tax structure.
As we said, North Carolina has a flat tax of 18 percent. But tax rates across the country vary wildly. The lowest tax rate is 6.75 percent in Iowa. But the highest? It’s 51 percent in New York. The national average is actually 19 percent, meaning North Carolina is just under it.
However, the trend appears to be higher taxes. Illinois’ sports betting is largely responsible for this. They at one point had a flat tax structure of 15 percent. Then over the summer, it introduced a progressive tax (based on revenue) that ranged from 20 percent to 40 percent. Now many other states are pondering raising rates too.
Who is to say South Carolina couldn’t tax sports betting at 25 percent or so? It’s still not eye-gouging numbers like New York, but it’s about 50 percent higher than North Carolina. A tax like that could help cut the gap between the two states since South Carolina isn’t as highly populated.
This is all hypotheticals, of course. The first order of business is to legalize sports betting inside the state to begin with. There has been interest to do so in the past, and we strongly believe that interest is increasing given how North Carolina is outperforming expectations. We won’t be surprised if South Carolina ends up legalizing in 2025.
Best Betting Sites 