An unorthodox rivalry is developing between two states. And it has nothing to do with sports teams or who has the better pizza.
North Carolina legislators claim that a Virginia casino on its border is taking hundreds of millions of tax dollars from their state. Interestingly, this is not the first time The Tar Heel State has taken issue with the commonwealth over gambling.
To combat the latest issue, North Carolina is taking steps to build its own gambling market. If successful, it could take some air out of the expanding VA gambling industry.
Caesars Danville Casino at the center of the battle for tax money
There are currently three casinos operating in Virginia: Hard Rock Hotel & Casino Bristol, Caesars Danville Casino and Rivers Casino Portsmouth. Only the latter is fully operational, while the other two are running temporary facilities while permanent ones are under construction.
The largest source of lost tax dollars for North Carolina is Caesars Danville Casino. It sits just across the border with North Carolina. Caesars Virginia is thriving alongside the rest of the Virginia casino gambling market since opening its temporary facility a little over two months ago. Of the $10.3 million in tax revenue contributed to the state through casino gambling in July, $3.85 million came from Caesars.
One of Caesars’ biggest boons is players from North Carolina crossing the border to visit the casino. According to state auditors, as much as 86% of Caesars’ revenue comes from out-of-state players. There is no data on exactly how much is from North Carolina customers. But it’s probably significant considering the state’s close proximity to the casino.
One estimation from NC State Sen. Phil Berger is that North Carolina is losing upwards of $250 million a year.
Lost gambling revenue has been an issue
North Carolina did not add a state lottery until 2006. The Virginia Lottery began nearly 20 years earlier, in 1988. Until The Tar Heel State took that step forward, NC residents would routinely travel to Virginia to buy lottery tickets. This was especially true when lottery jackpots grew to massive amounts.
At the time, Virginia Lottery spokesperson Cleve Packer told WRAL News the state benefitted greatly from North Carolina players crossing the border to play.
“We get a lot of North Carolinians because there is no lottery in North Carolina. And we love North Carolinians at the Virginia Lottery.”
Like a lottery decades ago, North Carolina has been late to the party when it comes to commercial casinos.
North Carolina prepares to build its own casinos
Plans are in the works for North Carolina to once again try to capture dollars flowing to its northern neighbor.
The state is currently considering adding casinos to three economically starved communities. The three counties would be Anson, Nash and Rockingham, with the latter being just a 20-minute drive from Caesars Danville Casino.
While three tribal casinos have been in operation in North Carolina, all three are far away from high population areas.
According to Berger, the addition of commercial casinos could “stem the tide” of revenue being lost to Virginia.
Besides hanging onto lost tax revenue, North Carolina’s goal of adding casinos is to help areas that have low employment rates and low median income by adding a new industry. Other counties that need assistance could be considered to host a casino in the future as well.
Companies chosen to run these casinos will have to invest $1.5 billion into the plans and create no less than 5,250 jobs in total, according to the current proposal. Berger estimates the casinos could generate up to $15 million per year for each county.
Additionally, there could be another tribal casino added that would be owned and operated by the Lumbee Tribe.
Online sports betting will soon launch in North Carolina
On top of trying to add casinos, North Carolina passed legislation to legalize online sports betting in June.
No online sportsbooks are currently in operation in the state as a regulatory system is created, but getting legislators on both sides of the political spectrum to come together to pass the bill was no easy task. Retail sports betting at brick-and-mortar sportsbooks was launched back in March 2021, but online sports betting has lagged. Currently, the expectation is for a January launch.
Most importantly for the college sports-obsessed state of North Carolina is that betting will be allowed on college sports and the Olympics. This is a big difference from Virginia sports betting, which bans betting on collegiate contests involving in-state teams. This could potentially bring Virginians across the border to bet on major events, including March Madness in 2024.
The plan is to bring a maximum of 12 mobile sportsbooks to North Carolina, but there is no indication if all 12 slots will be filled when online sports wagering launches. There will be another eight licenses available for sports facilities to add a retail sports betting lounge to arenas. Mobile licenses will cost $1 million a year for five years and no sports wagers can be placed on tribal land. Operators will be taxed 18% on adjusted gross revenue.
