One former sports betting operator and a currently licensed sportsbook received civil penalties for violating North Carolina gaming laws, regulators announced during Wednesday’s commission meeting.
Key Takeaways
- North Carolina gaming regulators fined Underdog $175,000 for not verifying the age and identity of 38 underage accounts.
- bet365 paid a $75,000 fine for contacting customers on self-exclusion lists.
- The agency proposed a new prohibition on sports event contract trading.
N.C. State Gaming Lottery Commission chief regulatory officer Eric Snider said Underdog Sports self-reported failing to verify the age and identity of 38 underage accounts, allowing individuals under 21 to access the operator’s sportsbook, which violates state law. Snider said eight of the underage accounts placed bets.
Underdog was fined $175,000 as part of a settlement and cooperated with the investigation. The offenses occurred while Underdog was operating sports betting in North Carolina.
The company gave up its license in December as part of a “business decision.” North Carolina was the only jurisdiction where Underdog, known for daily fantasy sports, operated a traditional sportsbook. Underdog was among the first eight operators to launch in March 2024 but left the state and turned down a sports betting license in Missouri to venture into prediction markets.
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Illegal contact
The regulatory agency also fined bet365 $75,000 after the current North Carolina sportsbook issued a push notification to account holders who were on the operator’s self-excluded list.
Some other enrollees of the state’s self-exclusion program were also illegally contacted by bet365, and the sportsbook had a technical issue that failed to add the self-exclusion list to its platform for a “limited amount of time.”
The operator self-reported the violation and cooperated with the investigation. Snider said bet365 has fixed the technical issue that affected customers, implemented new training, and updated its documentation process.
Landscape changes
During Wednesday’s public meeting, the commissioners were also informed of a potential policy change that would prohibit them from trading sports event contracts that are offered by prediction markets.
North Carolina became the first state with legal sports betting to allow prediction markets like Kalshi and Polymarket to offer contracts on leagues like the NFL, NBA, MLB, and NHL when lawmakers and Gov. Josh Stein approved a new law in July.
Prediction markets will be taxed 6% by the North Carolina Department of Revenue and are not regulated or part of the gaming commission.
The gaming commission’s proposal echoes an executive order issued by Stein earlier this year that bans all state government employees and agency commissioners from using non-public information to trade on prediction markets.
Too close
Snider said regulators are regularly informed of suspicious wagering activity and are too closely tied to sports leagues. Because of a potential conflict of interest, regulators will decide in December to adopt the policy change.
“It’s not a blanket prohibition on Kalshi or Polymarket or any of these federally licensed prediction markets,” Snider told commissioners. “It’s focused on those sports event contracts. Here at the agency, when we regulate sports, we play a very important role in respect to maintaining the integrity of the sports.”
The proposed prohibition would also be limited to sports markets offered by N.C. sportsbooks.
