North Carolina Lottery Bill Seeking to Legalize Tavern Gambling Advances

Posted on: September 1, 2021, 09:05h. 

Last updated on: September 1, 2021, 09:50h.

North Carolina lawmakers have moved forward on legislation that seeks to legalize lottery terminals in the wake of grey market gambling machines flooding state watering holes over the past decade.

North Carolina lottery slot VLT gaming
Customers in a North Carolina restaurant test their luck on unlicensed gaming machines back in March of 2012. Nearly a decade later, the controversial terminals remain in legal limbo. (Image: Associated Press)

House Bill 954 was passed this week in the House Commerce Committee. The statute would allow businesses that serve wine and beer to house up to 10 video lottery terminals (VLTs). Customers would be able to play the games of chance, which closely mimic traditional slot machines, with the opportunity to win cash.

The goal of the legislation, supporters say, is to rid North Carolina of the unregulated gaming devices currently operating. Efforts to outlaw such controversial gaming machines have been repeatedly circumvented by the manufacturers, who have adjusted the gameplay to avoid legal stipulations.

“We pass a law, and they change the game. They dance around. We pass another law. They do the same,” explained HB 954 sponsor Rep. Harry Warren (R-Rowan County).

If HB 954 becomes law, the VLTs would be connected to a central monitoring system that would supervise play across all of the machines. The devices would act as revenue generators for the North Carolina Lottery.

Legalize to Expunge Illegal Games

Warren believes allowing restaurants and bars to legally receive as many as 10 VLTs would lead to businesses removing their unregulated and unlicensed terminals. Spectrum Gaming, an independent consultancy based in Pennsylvania, reported in its 2021 North Carolina Gaming Study that there are an estimated 90,000 unlicensed gaming devices throughout the state.

Opponents, however, argue HB 954 will only lead to more gaming positions.

This bill doesn’t eliminate the machines that are already there. It just adds a large number of additional machines to continue to prey on our citizens,” declared Eddie Caldwell, executive vice president and general counsel of the North Carolina Sheriffs’ Association.

“These are not high roller folks that can afford to go to Vegas, but these are folks that are betting their rent money and their grocery money,” Caldwell added in the Sheriffs’ Association’s explanation of its HB 954 opposition.

VLT Details

HB 954 now resides in the North Carolina House Finance Committee. Though the state legislature’s 2021 session is winding down, with the General Assembly set to adjourn on September 16, House lawmakers are optimistic that they can get the VLT bill passed. The odds of the measure rushing through the Senate, however, remain long.

HB 954 specifies that gross gaming revenue generated by the licensed VLTs would be subject to an effective tax rate of 40 percent. The legislation requires that 32 percent of the VLT tax funds be set aside for a newly formed account called the North Carolina Video Lottery Fund. The remaining eight percent would be allocated for administrative expenses incurred by the state to regulate such gaming.

Manufacturers, distributors, and businesses would share the remaining 60 percent of the proceeds. Background checks on license applications would be completed in an effort to eradicate bad actors from the industry.

“What we’re trying to do in this legislation is to get rid of the unsavory characters that are out there who are operating now and would not meet the qualifications,” Warren concluded.

Seven states have legal video gaming in small businesses — Illinois, Louisiana, Oregon, Pennsylvania, South Dakota, West Virginia, and Georgia.