Most of the state’s public universities will split $10.7 million of sports betting revenue this year. The money, which comes from taxes placed on bets, is more than twice as much as university athletic directors thought they would receive.
Sports betting has been legal in North Carolina since March. According to the North Carolina State Lottery Commission, gamblers spent over $1.9 billion in bets from March to June. Combined with promotional funds, the state’s total wagering revenue has topped $2.2 billion.
State law requires sports wagering companies to pay an 18% tax on their gross wagering revenue. The proceeds are split among several state agencies and organizations including the state Lottery Commission, Department of Health and North Carolina Amateur Sports.
Thirteen of the state’s public universities are set to receive 20% of the remaining tax revenue plus a base amount of $300,000. They are: Appalachian State, East Carolina, Elizabeth City State, Fayetteville State, NC A&T, NC Central, UNC Asheville, UNC Charlotte, UNC Greensboro, UNC Pembroke, UNC Wilmington, Western Carolina and Winston-Salem State.
University athletic directors were expecting to receive around $300,000 for the first year of sports betting. Instead, they will get about $820,000 each.
This money will be a much-needed boost for several of the universities, where small athletic departments struggle to financially support themselves.
“The importance of using these (sports betting) funds is to help ensure our athletic programs are not operating in a deficit,” UNC System Chief Financial Officer Jennifer Haygood said at a July Board of Governors meeting. “And to improve the financial sustainability of the athletic programs, which for many of our institutions is a financial Achilles’ heel.”
The athletic departments at NC State and UNC-Chapel Hill are not receiving any money from the sports gambling taxes as it was determined that their athletic departments had multiple sources of revenue not available to smaller programs.
That provision may have changed if the legislature had passed a budget update this year, as one proposal included a 5% tax revenue provision for NC State and UNC-Chapel Hill. The two universities would have received $930,000 next year.
The General Assembly estimates it will send over $26 million of sports betting proceeds to the UNC System next year. This means each of the 13 schools will receive at least $2 million dollars each.
Haygood said the UNC System would be “putting some mechanisms in place” to monitor how university athletic departments are spending the funds. In January, the UNC System updated its intercollegiate athletics policy to add special requirements for university athletic departments receiving money from the state.
University chancellors must send UNC System President Peter Hans a five-year budget plan to show how their athletic departments will use the betting tax revenue to correct deficits, decrease reliance on non-athletic trust funds and prevent “significant” increases to student fees.
