Underdog Sports, unlike other companies in the industry, has recently expressed its support for the GRIT Act. This bold decision comes at a time when online sports betting is being introduced in North Carolina, including the launch of new North Carolina sportsbooks and betting apps.

The GRIT Act, introduced by US Sen. Richard Blumenthal and US Rep. Andrea Salinas, suggests that half of the excise tax generated from sports betting should be allocated to prevention, treatment and education for gambling addiction. Despite receiving criticism from various players in the industry, Underdog Sports remains steadfast in its endorsement of the Act as an important step towards responsible gambling initiatives.

The GRIT Act; A Federal Funding Solution for Responsible Gambling

As Underdog Sports gears up to enter North Carolina’s online betting market, it recognizes the need for federal oversight in addressing problem gambling. The approach taken by the GRIT Act to fund these initiatives through a federal excise tax of 0.25% on total betting spending has sparked debate. Critics argue that this tax puts legal markets at a disadvantage compared to illegal operators who avoid such taxes.
However, the National Council on Problem Gambling disputes this viewpoint, emphasizing the lack of federal agencies and funding specifically designated for addressing gambling addiction. Alex Kane, CEO of Sporttrade, recognizes the significance of supporting responsible gambling efforts but raises concerns about the tax structure that is tied to total bets.

Potential Effects of the GRIT Act in North Carolina

The precise amount that North Carolina could receive from the GRIT Act remains uncertain. However, the distribution plan is clear; 50% of the federal excise tax imposed on sports betting would be allocated to initiatives promoting responsible gambling. This allocation would further divide with 75% going to state Departments of Health and Human Services and 25% directed towards research by the National Institute of Drug Abuse.

Estimations for total federal excise tax revenue vary and figures for FY23 are still unclear. The National Council on Problem Gambling estimates revenue around $274 million for FY22, anticipating an increase due to new markets such as Ohio, Maryland and Massachusetts. However, Adam Hoffer from the Tax Foundation predicts a lower figure of $260 million for FY23.

Based on Hoffer’s estimation, approximately $130 million would be dedicated towards initiatives addressing problem gambling. The allocation of these funds would follow a needs based formula that takes into account factors like at risk population size and service costs.
The specific portion allocated to North Carolina is still uncertain since the legislation is still pending.

North Carolina’s Approach to Funding for Problem Gambling

The ongoing discussion regarding the GRIT Act raises a broader question about how to effectively tackle problem gambling both at the federal level and specifically in North Carolina. The state is expected to benefit from its own tax revenue generated by online sports betting, projected to bring in approximately $2 million annually for the NCDHHS. This funding at the state level will play a crucial role in supporting efforts related to prevention and treatment of problem gambling.

At the same time, promotional offers from North Carolina sportsbooks and the availability of Caesars North Carolina promo code continue to attract bettors to this rapidly growing market. While these promotions contribute to engagement and excitement within the state’s sports betting industry, it is important that responsible gambling practices and effective support systems are given due consideration as they remain significant concerns.

To sum up, Underdog Sports endorsement of the GRIT Act highlights the pressing need for comprehensive measures aimed at addressing gambling addiction. As North Carolina prepares for the launch of its online betting market, both the state and industry stakeholders face a challenge in striking a balance between facilitating growth within this sector while ensuring responsible gambling remains a priority.

✅ Updated on February 7, 2024 by Frank Sutton