North Carolina saw a rush of interest when it opened online sports betting license applications last year, receiving 18 applicants in the first month. However, no new applicants have requested licensing packets since the new year began despite three licenses still being available.

The initial flood of applicants met the state’s recommended December 27 deadline to submit completed applications before the March 11 launch date. Eight commercial online sportsbooks cleared the licensing process and pending final regulatory approval, will go live when North Carolina online sports betting kicks off.

Smaller Books Exit Crowded National Market

International gambling company Kindred Group announced last November that its Unibet sports betting brand would leave the US market by the second quarter of 2024. Unibet only operated in five states and had limited reach. Kindred’s CEO cited “cost reduction” in explaining Unibet’s decision to refocus abroad given its restricted growth potential domestically.

Other smaller sportsbooks like WynnBet have made similar calculations around deploying capital effectively versus competing in crowded state markets. Along with Unibet, WynnBet and Betr Sportsbook decided to forego launching in Massachusetts which initially had eight available online licenses. This leaves the state with six licensed operators planning to take bets when the market debuts.

High Costs Create Challenging North Carolina Environment

While North Carolina’s annual $1 million licensing fee comes in lower than neighboring states, significant additional costs present obstacles for smaller sportsbooks. These include expenses related to mobile app development, marketing, promotional offers, and third-party supplier contracts.

Last November, newly launched ESPN Bet accrued 7% national market share in its first month by spending over $50 million on new customer promotions. However, this led to larger than expected losses for parent company PENN Entertainment.

North Carolina Is Cost-Prohibitive for Smaller Books

Beyond licensing, North Carolina requires online operators to partner with in-state professional sports teams. This creates additional barriers limiting the pool of potential applicants.

Teams like the NFL’s Carolina Panthers will prioritize long-term commitments of around ten years. A Panthers partnership also carries a high price tag due to the team’s popularity and location in a top-20 media market.

The Panthers and other remaining franchises will focus partnership conversations on established sportsbooks with the resources to commit. The difficult economics have already forced smaller operators out of markets like North Carolina.

Next Window to Launch is September Football Season

With the NFL season concluded, any operator starting the North Carolina licensing process now would miss key launching opportunities. Applying today likely leads to a sportsbook going live after March Madness when betting activity slows during the summer months.

The football-driven weeks in September when the NFL, college football, and MLB postseasons overlap present the next window for a dark horse applicant to quickly make an impact after launch. Otherwise, operators may wait until next year’s application cycle to take a swing at gaining entry into the developing North Carolina online sports betting space.

✅ Fact Checked on February 27, 2024 by Ken Weaver