Most state universities will share $10.7 million in sports betting revenue this year, more than double the amount college athletic directors had expected to receive from taxes on gambling.
Sports betting has been legal in North Carolina since March. Gamblers wagered more than $1.9 billion between March and June, according to the North Carolina Lottery Commission. Combined with promotional dollars, the state’s gambling revenue totaled more than $2.2 billion.
State law requires sports betting companies to pay an 18% tax on gross gambling revenue, which is distributed among several state agencies and organizations, including the State Lottery Commission, the Department of Health and North Carolina Amateur Sports.
Thirteen state universities will receive 20 percent of the remaining tax revenue plus a base amount of $300,000. These universities are Appalachian State University, East Carolina University, Elizabeth City State University, Fayetteville State University, North Carolina Tech University, North Carolina Central University, University of North Carolina at Asheville, University of North Carolina at Charlotte, University of North Carolina at Greensboro, University of North Carolina at Pembroke, University of North Carolina at Wilmington, Western Carolina University and Winston-Salem State University.
College athletic directors had expected to receive about $300,000 in the first year of sports betting, but in reality, each will receive about $820,000.
The money will provide much-needed support to some universities whose smaller athletic departments are struggling to stay financially independent.
“The importance of using these (sports betting) funds is to ensure that our athletic programs are not operating at a deficit,” Jennifer Haygood, the University of North Carolina’s chief financial officer, told a July board of trustees meeting, “and to improve the financial sustainability of our athletic programs, which is a financial weakness for many of our institutions.”
The athletic departments at North Carolina State University and the University of North Carolina at Chapel Hill have not received any funds from the sports betting tax because it was determined they have multiple revenue sources not available to smaller programs.
That provision could have been changed if the Legislature had passed a budget this year, because one of the proposals included a 5% tax cut for North Carolina State University and the University of North Carolina at Chapel Hill, which would have received $930,000 next year.
The General Assembly estimates it will send more than $26 million in sports betting revenue to the UNC System next year, meaning each of the 13 schools will receive at least $2 million.
Haygood said the UNC System will “put some mechanisms in place” to monitor how university athletics departments spend their funds. In January, the UNC System updated its intercollegiate athletics policy to add specific requirements for university athletics departments that receive state funding.
The university president must send a five-year budget plan to UNC System Chancellor Peter Hance, outlining how the athletic department will use gambling tax revenue to fix the deficit, reduce reliance on non-athletic trust funds and prevent a “significant” increase in student tuition.
