South Carolina Legislators Introduce New Sports Betting Bill

On Thursday, legislative officials in South Carolina introduced a new sports betting bill for the second time in the last three years. House Bill 5277 is sponsored by Representative William Herbkersman (R) and Representative Todd Rutherford (D). The bipartisan bill would pave the path for the legalization of sports betting in the Palmetto State later this year.

How Many Licenses Would be Up for Grabs?

HB5277 would call for between eight and twelve online sports betting operators who would be required to partner with a state entity to operate. Entities such as professional sports franchises, PGA Tour event hosts, and event promoters for national stock car auto racing would be eligible. South Carolina has no major professional franchise in any of the big four leagues of the NFL, NHL, NBA, and MLB, so it’s unclear which teams this refers to.

Tax Rate on the Lower End

HB5277 calls for a 10% sports betting tax rate on adjusted gross gaming revenue (GGR). In addition, entities approved for a sports betting license would be required to pay a $500,000 annual license fee and a non-refundable application fee.

That tax rate is on the lower end across the country, so there could be some deliberation about a higher rate. The only states with fully legalized sports betting and a tax rate of 10% or lower on GGR are Arizona, Colorado, Indiana, Iowa, Nevada, Ohio, West Virginia, Wyoming, and the District of Columbia. Just nine of the 30 states with legal online or retail sports betting.

Further Details of HB5277

While South Carolina doesn’t have any major professional sports franchises, it’s home to several big-name collegiate programs, including Clemson and the University of South Carolina. Fans of those programs and college sports will be excited to learn that the proposed bill includes the permittance of betting on both college sports and esports.

According to language in HB5277, 80% of tax revenue from sports betting will be allocated to the education lottery account, 15% would go to the general fund (transportation, roads, and public buildings), and 5% would be allocated to the Department of Mental Health for problem and responsible gaming programs.

HB5277 also calls for establishing a Lottery Commission Sports Wagering Advisory Council, which would be the regulatory body for sports betting for the lottery. The council would consist of nine members, with three each appointed by the governor, Senate president, and speaker of the House.

Second Stab at Sports Betting

South Carolina representatives originally introduced HB3395 in 2020 with Rep. Rutherford as a co-sponsor, but it didn’t get very far in the legislative process. The bill never specified between online or retail sports betting or the proposed tax rate, and it never came up for a vote. It has remained in the House Committee on Judiciary since early 2021. HB5277 seems far more likely to make significant progress.

Next Steps in South Carolina

The current South Carolina legislative session ends on June 15, so legislators have until that date to pass the current bill through both chambers before it heads to the desk of Governor Henry McMaster for signature. McMaster has been critical of sports betting, saying it’s counteractive to the state’s values, but he’s up for re-election in November, and he could change his tune depending on the support the bill receives.

Joe Cunningham, a former United States congressman, is one of the top candidates for Governor in the fall, and he’s been vocal with his support for sports betting as he claims the state misses out on up to $100 million per year in tax revenue. Rep. Rutherford estimated the bill could bring in up to $40 million per year in revenue for the state.