NC braces for more problem gambling as online sports betting nears launch

North Carolina mental health experts expect the launch of sports betting across the state will bring a rise in problem gambling. And they warn that college students are particularly vulnerable.

Legalized under a bipartisan bill state lawmakers passed in 2023, analysts expect sports betting will draw nearly $4 billion in wagers during the first full year of operation. It all begins with the launch of a dozen online sportsbooks that will accept the first bets days ahead of the ACC and NCAA men’s basketball tournaments in March.

In-person betting at stadiums and other venues will eventually follow. By 2027, state officials project taxes on sports gambling will contribute more than $40 million to North Carolina’s general fund every year.

But as state leaders eye increased revenues, addiction counselors and others are preparing for a rising demand in treatment for problem gambling, a spectrum of behaviors that range from a growing preoccupation with betting to those that result in serious legal or financial problems.

The risks are greater for young adults nationwide, who according to state health officials experience the highest rates of problem gambling.

Surveys in North Carolina already show a majority of college students have gambled in the past year — before the start of legal sports betting here. And although state law limits wagering to ages 21 and up, advocates worry that easily accessible mobile betting and a deluge of advertising will have consequences for the college-aged population.

“They’re more prone to take risks than older adults. They may also be less aware of the concept that, regardless of if there’s skill involved, it’s still gambling,” Amanda Winters, who heads the state’s Problem Gambling Program, said. “You can never out-skill chance.”

State leaders have taken steps to address an expected increased need for services. Lawmakers tripled the Problem Gambling Program’s budget with an additional $2 million annually starting in the next fiscal year, funded by an 18% tax on sports betting revenue. That $2 million accounts for 2 to 3% of what the state expects to clear from sports betting.

But unlike the $15 to $22 million state law will allocate to college athletic programs each year, the state Problem Gambling Program allocation won’t increase with additional gaming revenue.

A fund to “encourage and promote the attraction of major events,” by comparison, is expected to draw anywhere from $16.9 million to $26.9 million a year from taxes on sports wagering, according to state budget analysts.

The question now is whether the funding for treatment will be enough to handle the expected increase in demand.

“Is North Carolina ready? No,” said Michelle Malkin, assistant professor of criminal justice and criminology and director of the Gambling Research and Policy Initiative at East Carolina University. “Is North Carolina ahead of the game in terms of what we see in other states? Yes.”

Survey: Most students view gambling as problem

Although its budget has been stagnant since the creation of the state’s lottery in 2005, the Problem Gambling Program has seen a steady uptick in requests for help since the COVID-19 pandemic, Winters said.

The program’s hotline (1-877-718-5543), which connects people to trained counselors by phone or text around the clock at no cost, went from 200 to 300 calls in 2019 to more than 800 this year. Winters said they’ll likely break 1,000 before the fiscal year ends in June.

The expansion of sports betting in March isn’t likely to increase call volume immediately, she said, noting that it might take problem gamblers or their families months to realize they need help. Information that could help North Carolina with planning in the meantime hasn’t always been easy to find.

“No other states have really published their helpline data from the expansion of sports gambling,” Winters said. “We know other states have gotten more calls, but we don’t know what to expect in terms of a hard number.”

More than 35 states now allow legal sports betting in one form or another — a rapid expansion in gambling prompted by a U.S. Supreme Court decision in 2018.

But efforts to study the broader impacts of that growth are still in the early stages, says Malkin, whose research at ECU is funded by a grant from the state’s Problem Gambling Program.

That’s why she and colleagues have focused their efforts on gathering a baseline of how often people in North Carolina gamble — well before residents place their first legal sports bets.

Malkin’s preliminary research across 12 UNC System campuses shows that almost 60% of college students have gambled within the last year, with more men gambling than women. And more than half of the students surveyed, 60%, said they saw gambling as at least a minor issue on campus.

In the study, about 5% of students met the criteria for being at risk of a gambling disorder. That rate was much higher for men — about 12.8% compared to 1.6% for women.

The expansion of sports betting in other states hasn’t necessarily increased the proportion of students at risk for gambling disorders, Malkin said. But even if that stays the same, more people playing means more problem gambling.

“The lottery — it’s not as exciting for a lot of people as sports wagering can be,” Malkin said. “It gives them another way to be engaged in feeling like they’re part of the team.”

Part of the pull, she said, is the structure of the mobile apps, which are designed to keep players engaged with the opportunity to wager “every second of the game.”

“There’s going to be all these huge incentives and bonuses,” Malkin said. “It’s really hard for a college student who doesn’t have a lot of money, but does have $5 in their pocket, not to see this as an opportunity to make money fast.”

Marketing will only increase

Malkin also pointed to “a bombardment of advertising” sure to accompany the March 11 launch of sports betting.

That promotional blitz has already begun on broadcast and online — even though as of early February, no online sports betting companies have been licensed to operate in this state yet. Marketing from FanDuel on Reddit early this month, for example, says the sportsbook “is coming to North Carolina” along with fine print clarifying that its operation in the state is still “subject to regulatory approval.”

McClatchy-owned newspapers are among the media outlets hosting sponsored content promoting sports betting companies. The News & Observer and The Charlotte Observer promote the content on their homepages.

Gambling researchers and counselors expect to see much more of that advertising in the coming weeks. And the state’s own rules are unlikely to slow it down.

The N.C. State Lottery Commission, the agency responsible for the oversight of new sports gambling operations, acknowledged in a memo late last month outlining its new regulations that it had no plans to ban marketing for sports gambling outright — even those for sportsbooks outside the state. It cautioned operators, however, that they must abide by commission rules, including prohibitions against targeting minors and explicitly depicting college teams.

Violating those regulations could cost a sportsbook its license to operate in the state.

Commission spokesperson Van Denton declined to make anyone at the agency available for an interview for this story. But in an email, Denton said the commission’s rules, including regulations on responsible gaming, are designed to protect the public.

“The N.C. General Assembly made it clear that operators have to follow the law and the rules,” Denton wrote in an emailed statement. “The Commission, after gathering public comment, has put rules in on advertising and intends to enforce those rules.”

Winters said she has the “utmost faith” that the state has crafted rules that will protect the public as best they can. But given how recently sports betting has exploded nationwide, research on the actual impacts is still unclear.

“The ads can’t target high-risk populations, they can’t target youth, they can’t make false promises,” she said. “But that doesn’t mean it won’t impact people.”

More campuses need gambling screening, education

Among the solutions that can help reduce gambling disorders, Malkin said, is early education on the risks of gambling and how to recognize signs of trouble.

“We need to be educating individuals from a very young age about risk — that this is not just an easy way to make money,” Malkin said.

More screening for harmful gambling behaviors — now increasingly common for drug and alcohol abuse — can help too. But her research has so far found that education and screening efforts are “practically non-existent” on college campuses.

But there are some.

UNC-Chapel Hill hosts an online screening tool with specific questions about problematic gambling behaviors, said campus spokesperson Chloe Grace McCotter. And she said counseling services are available to help students with gambling issues.

Health education staffers on campus are also considering additional training, like a series on gambling from the School of Social Work, prompted by the launch of online sports betting, she said.

Gary Gray, president and executive director of the North Carolina Council on Problem Gambling, said it will be important for players — young and old — to remember sports betting isn’t really a way to make money.

“The worst thing you can do is get on a lucky streak and start winning,” Gray said. “You think you can be a professional.”

While he was glad to see an increase in the Problem Gambling Program’s “basically antiquated” funding, he said it’s likely demand for services will eventually outstrip even that money.

“Even the $2 million will probably not be enough in the long run,” Gray said.

If you or someone you know struggles with problem gambling, resources to help are available through the N.C. Problem Gambling Program at 1-877-718-5543 or morethanagame.nc.gov.