Sports Gambling is Going ‘Gangbusters.’ That’s Good and Bad.

As the composition of the University of North Carolina at Pembroke student body changed significantly over the past seven years, with more graduate and online students and fewer traditional undergrads, the athletic department faced a fiscal crisis.

It had previously been funded almost entirely by undergraduate student fees, which had rapidly declined. When North Carolina legalized sports gambling in March 2024, it earmarked 20% of tax revenue beyond expenses and a few other commitments for athletics at the 13 smallest UNC System schools.

For Pembroke, that was a “lifeline,” said Dick Christy, who was athletic director until recently. The school, which competes at the NCAA Division II level with a $5 million athletics budget, received about $1.4 million from gambling revenue in 2024 and about $2.4 million in 2025.

“Over half of the sports betting money was just replacing lost fee revenue,” said Christy, who moved into the chancellor’s office this spring as deputy chief of staff. “We were going to have to do something drastic had this not happened.”

Two years into legalization, the gaming industry considers North Carolina’s launch one of its success stories. The 18% tax on gambling revenue has generated more than $300 million for the state. 

“The state’s licensed sports betting market is safer for bettors, and to date the state’s licensees have demonstrated a commitment to compliance,” the N.C. State Lottery Commission, which oversees gambling in the state, said in a statement to The Assembly.

But this success has come at a price. The reality of the state’s sports gambling is not what lawmakers had originally envisioned. The development of apps and access to constant action has overtaken the physical Las Vegas-style sportsbooks designed as gathering places within sports venues.

Instead of making a wager on a Duke-UNC game or whether the Carolina Hurricanes will win the Stanley Cup, gaming apps now deliver second-by-second wagers on the next pitch of a baseball game or the next point of a table-tennis match overseas. This gamified experience is closer to a slot machine than a game of skill.

Meanwhile, gambling researchers are concerned that some of the harms seen elsewhere will become more visible in the state. And gambling-backed PACs are investing increasingly heavily in North Carolina politics, including this year’s primaries. 

“We [quickly] opened the lid on Pandora’s box all the way,” said Jonathan D. Cohen, who studies sports gambling for the American Institute for Boys and Men, a nonpartisan research organization. “We definitely got some online sports betting we didn’t count on. We also got prediction markets. We also got illegal gambling. We’ve raised the temperature, raised the volume on gambling writ large.”

Mea Culpa

As the sports columnist at the Raleigh News & Observer in the years leading up to legalization, I advocated for the state to adopt sports betting. I was of the belief that we were better off benefitting from the tax revenue of something people were doing anyway than letting it happen in the shadows.

It’s the same sin-tax argument that applies to alcohol or tobacco or, in other states, recreational marijuana. Why let the black market benefit when it could be regulated in a way that benefitted the populace?

Sports teams like the Hurricanes and Carolina Panthers were all for it, making plans to carve out space in their arenas and stadiums where fans could eat, drink, and gamble, while salivating over new advertising revenue. It seemed like a no-lose proposition.

Gambling never is.

This is my mea culpa on sports gambling. I’d like to have this one back.

The initial pitch on sports gambling was for physical sportsbooks in sports venues. You could go and drink a beer, have some chicken fingers, watch a game, and place a bet. 

Unfortunately for North Carolina, the adoption of sports gambling coincided with the rise of gambling apps. What was theorized to take place in a physical location moved into the palm of your hand. Something that was supposed to be an occasion became a constant.

All the ads, promotions, push notifications, and ESPN content also made sports gambling far more in-your-face than I ever imagined, far more pervasive, far more ubiquitous. The ability to bet continuously on a constant stream of seemingly random events feels less like picking a winner and more like watching the reels spin on a slot machine.

I’d bought the argument that gambling was happening anyway, when the reality was very few people were taking the trouble to bet with bookies or transfer crypto to an offshore book in the Bahamas. When a state legalizes gambling, research shows that most bettors are new, and many are underage.

“What you believed was thrust upon you through the power of money and influence and the power that they control from the top down,” Brianne Doura-Schawohl, the director of the national Campaign for Fairer Gambling, a gambling-reform organization, told me.

But what’s done is done. The question we all face now is: How can we best manage gambling for the good of the state?

Quick Cash

About $143 million of the gambling tax revenue has come over the past 12 months, according to the lottery commission, which licenses sports gambling operators and monitors compliance with state law. From an industry perspective, those numbers are a success story.

According to the American Gaming Association, sports gambling revenue in North Carolina’s first full year was 86% higher than Tennessee’s and 65% higher than Virginia’s. (By population, North Carolina is 53% larger than Tennessee and 26% larger than Virginia. Those two states have had legal sports betting for at least six years.)

“That’s going gangbusters,” said Tres York, the vice president of government relations for the American Gaming Association, a trade group. “That kind of takeoff in a first year is something that you don’t often see in some of these other states with launches. That’s certainly unique to North Carolina.”

Of the total gambling tax revenue, $2 million per year goes to the state Department of Health and Human Services for gambling addiction treatment and research; $2 million to youth and amateur sports; and $300,000 to the athletic departments of each of 13 UNC System schools, the two biggest excluded. Of the remaining funds, 20% is split among the 13 athletic departments, while 30% goes to a fund that supports major events in the state. The remaining half goes into the state’s general fund.

That changes in the new state budget, as the tax rises to 23% and N.C. State and UNC-Chapel Hill will now benefit. State universities will now receive funds in tiers based on their level of NCAA competition. UNC and N.C. State could make as much as $5.8 million per year; Division II schools like UNC Pembroke or Elizabeth City State will now be capped at $2.9 million per year. 

“Sports wagering funds have provided essential support to Elizabeth City State University Athletics by addressing budget deficits and enhancing the overall athletic experience for our student-athletes,” the school’s athletic director James Dubose wrote in an email. “These funds have also enabled us to invest in improved facilities and secure better equipment … This funding is pivotal in fostering a well-rounded and enriching experience, ensuring that our athletes can excel both in the classroom and competition.”

While the college sports programs get a windfall, the $2 million allocated for research and treatment of problematic gambling is inadequate, says Michelle Malkin, an East Carolina professor of criminal justice and criminology who studies its impacts. Opponents say the funding’s focus on addiction, rather than larger societal impacts, obscures gambling’s real harms.

Debt and Disorder

In the eight years since the U.S. Supreme Court decision that lifted a national ban on sports gambling outside of Las Vegas, Atlantic City, N.J., and tribal casinos, researchers have discovered significant disparities between states with legal sports gambling and states without.

A joint UCLA/USC study found that in the 39 states that have adopted sports gambling, the average consumer credit score decreased by 2.75 points as bankruptcy rates, debt sent to collection agencies, and auto loan delinquencies all increased. (Credit ratings typically range from a low of 300 to a high of 850.) “Together, these results indicate that the ease of access to sports gambling is harming consumer financial health by increasing their level of debt,” the study found. 

Other studies have found that the quarterly rate of diagnosed gambling disorder has increased 61% in states that legalized sports betting, while dropping 29% in states that have not. Rates of child maltreatment and divorce also increased.

“We have not modernized our thinking and our understanding of gambling-related harm: What that means, what that looks like and how many people are impacted, including spouses,” said Doura-Schawohl, who previously lobbied for the National Council on Problem Gambling.

Meanwhile, sports gambling accounted for only 0.2% of state tax receipts on average nationally without accounting for impacts elsewhere on the budget, according to the Manhattan Institute, a conservative think tank. “The well-documented social costs of legalization inevitably end up on states’ balance sheets, generating costs that, under reasonable assumptions, well exceed revenue,” it concluded.

Those impacts extend to politics, where gambling-backed PACs have invested heavily in elections on both sides of the aisle across the country and in North Carolina.

In Cabarrus County, the former chairman of the county commissioners, Chris Measmer, was appointed to the state Senate in April 2025 to fill a vacancy in District 34. Former state Rep. Kevin Crutchfield defeated him in March’s Republican primary. Crutchfield was a co-sponsor of the 2023 bill that legalized sports gambling.

The American Conservative Fund, a PAC entirely funded by sports-gambling interests, invested in the race, paying for direct mail, radio, and television advertisements. None of them mentioned gambling, but painted Measmer as a “Republican in name only” and accused him of voting for a spending bill that never received a vote.

“Special interests are attempting to buy votes by meddling in Republican Senate races,” Measmer said in a statement. “That’s exactly what happened in my race. They spent millions of dollars, hired well-connected lobbyists and political consultants, and launched a stealth campaign to replace senators who, they believe, are blocking their agenda. It’s not about good policy. It’s about buying votes in the legislature.”

The same PAC also spent heavily in Lee County’s Republican primary for the District 51 House seat, where it successfully backed former Sanford city councilman Charles Taylor over Sherry Lynn Womack, the chairwoman of the county board of education. In Haywood County’s House District 118, the PAC’s support wasn’t enough to help incumbent Mark Pless fend off a challenge from Jimmy Rogers in the Republican primary. Pless voted for the gambling bill in 2023.

Minimizing Harm

As legislators try to squeeze more money from sports gambling, the toothpaste isn’t going back in the tube. But advocates say there are ways North Carolina can moderate and regulate gambling to minimize its harms.

Limiting microbetting—wagering on individual pitches and points—would remove some of the slot-machine aspects of sports betting. For more than a year, NCAA president Charlie Baker has been lobbying states to remove “player prop bets,” or wagers on individual player performances, for college sports. Those are legal in North Carolina but not in some other states, and have been implicated in scandals in college sports, the NBA, and MLB while also subjecting athletes to harassment from losing bettors.

“Upholding the integrity of college sports is paramount,” Atlantic Coast Conference commissioner Jim Phillips told The Assembly. “There is a great deal of room for abuse, whether it’s prop bets or other avenues that we see, like young people gambling. We’ve pushed hard for limitations around them. It’s evolving. I don’t think anyone feels comfortable completely about where we find ourselves, whether it’s in North Carolina or somewhere else.”

State regulators could require the use of biometric data to ensure minors can’t use their parents’ accounts to place bets. In Ohio, 620 underage bettors wagered a total of $2.8 million on the DraftKings app over a two-year period, a USA Today analysis found.

Similarly, gambling apps could be barred from using push notifications to encourage gambling, which seamlessly advertise directly to bettors on the same device they use to gamble, encouraging them to gamble more. Colorado just became the first state to make that illegal. The state could also restrict the use of credit cards and gift cards to make deposits into gambling accounts, which reward impulsivity and debt spending.

Any and all of this would reorient North Carolina’s approach to better match how the industry has developed.

“It’s quickly gone in two years time from something where you intentionally make a cognizant choice—you get in your car and take cash to a casino and have a drink and food and then leave—to now where it’s 24/7, 365 accessibility and you’re able to make a sports bet on anything your mind could fathom,” Doura-Schawohl said. “More often now we talk about middle-of-the-night gambling on table tennis or surfing or other obscure sports. The whole pretense of the act has changed.”

And that doesn’t even get into new prediction markets like Kalshi and Polymarket, which are essentially unregulated sportsbooks. In a baffling provision in the new state budget, these platforms will be taxed at just 6% and oversight left to the federal Commodity Futures Trading Commission. Many of the licensed sports-wagering providers in North Carolina could eventually transition their frequent gamblers to their own prediction apps, depriving the state of both oversight and tax revenue.

“This could cost North Carolina hundreds of millions of dollars depending on what operators decide to do,” York, of the American Gaming Association, said. “It’s the polar opposite of what other states have tried to do. … I don’t think this was fully thought through. The repercussions are not clear to a lot of folks.”

Then again, the same could be said of sports gambling at large in North Carolina, where the longer-term repercussions are yet to become apparent.