From Parlay to Policy: South Carolina’s Online Sports Betting Debate

It is Sunday night, February 9, 2025. You are at your weird co-worker’s house along with 30 other people, most of which you have never met. While you are bored with this year’s rematch of the Kansas City Chiefs and Philadelphia Eagles, but you aren’t just here to hate-watch Super Bowl LVII Part Two. A cheer goes up from roughly half of the gathered party; Jalen Hurts has just danced into the end zone for the first scoring play of the game. While this is great news for the Philly faithful, it is not for you. You just missed a $100 parlay after correctly guessing who would win the coin toss and whether Budweiser or Ford would have the first commercial of the game, because you also bet that the first score of the Super Bowl would come via the air. That’s $100 down the drain for you, and $100 that DraftKings (or any number of online sports betting platforms) will gladly keep. Unless, of course, you live in South Carolina.

In the Palmetto State, online sports gambling is illegal, and if you attempt to access the numerous operators’ site or mobile phone application within the borders of this state, you receive a polite message informing you that “[inset your online bookie of choice] is not available in South Carolina yet.” According to the American Gaming Association, South Carolina is not alone in its total ban of online sports gambling. In 11 states, online sports betting is completely illegal, while 38 states plus the District of Columbia allow some form of this entertainment (there is one state that has made it legal but does not yet have an operational online sports books). 31 states (and DC) allow you to take online sports gambling a step further and have authorized sites such as DraftKings to operate mobile phone apps, giving users the convenience of placing bets from the palms of their hands. According to a 2023 report, online sports betting retailers posted a whopping $10,920,000,000 (that $10.92 billion with a B) in revenue in 2023. That is a 44.5% year over year increase from the previous record set in 2022. According to that same report, the win percentage of users during that time frame was just 9.1%. In 2023, New York state alone accumulated $1.697 billion in revenue from online sports gambling, followed by New Jersey ($1.007 billion) and Illinois ($1.002 billion). While an enormous number, the $10.92 billion in revenue from 2023 was just 16.67% of all gambling revenues in the United States. However, analysts believe that, as more states legalize online sports betting, that percentage will continue to rise every year. The American Gaming Association states that taxes on these revenues, and on the individual online bets placed, generated $14.4 billion for state and local governments in 2023.

Given the windfall that states have experienced from this type of gaming, why hasn’t South Carolina joined the growing list of jurisdictions that allow its citizens to place their knowledge of their favorite sports against their wallets?

For some background, South Carolina has a comprehensive set of laws regulating gambling activities within the state. These laws cover various aspects of gambling, including the prohibition of certain types of games, penalties for engaging in illegal gambling activities, and specific regulations for lottery operations. The statutes and regulations aim to control and limit gambling activities to ensure they are conducted legally and ethically. Under S.C. Code § 16-19-130, various forms of betting, including bookmaking and pool selling, are prohibited within the state. This statute explicitly forbids engaging in betting activities, keeping or occupying places for betting, and recording or registering bets or wagers. Additionally, S.C. Code § 12-21-2710, reinforces the prohibition by criminalizing the possession and use of gaming devices within the state, except for specific exemptions related to out-of-state jurisdictions. Furthermore, the South Carolina Supreme Court has also interpreted the term “gambling” broadly to include any game where money is wagered, regardless of the skill involved.

These laws include a vast array of gambling-related activities from operating a gambling house, conducting a private poker game, to placing bets on sports, and the penalties for violating these statutes can be extreme. Under S.C. Code § 12-21-2710, violators who are caught operating a video poker machine can face a fine of up to $500 and a year in prison. If a person is caught in an illegal gambling hall, they can face 30 days in jail, while the owner and operator of that business can be sentenced to a year plus a $2,000 fine for each offense. Curiously, South Carolinians that are caught bookmaking can be charged and convicted under S.C. Code § 16-19-130, but the statute does not lay out penalties for these offenses, allowing judges to craft their own sentences upon conviction.

South Carolina’s prohibition on gambling is not a new phenomenon. In fact, the Supreme Court of South Carolina, in 1993, noted that the basic statutory framework to discourage gambling within the state “has remain unchanged since 1712, when it was adopted from English law by the ‘reception statute’ passed by the South Carolina colonial assembly.” Berkebile v. Outen, 311 S.C. 50 (1993). For reference, the South Carolina government (then colonial, now state) has tried to close the lid on gambling in the Palmetto State since the same year that Peter the Great moved the capitol of Russia from Moscow to St. Petersburg and Ludwig van Beethoven’s grandfather was born.

All of this is discouraging news to Sandlappers that want to spend their Saturdays in the fall cheering on the Gamecocks or Tigers while also betting their hard-earned money on the outcomes of games throughout the country. However, there are some in the State Legislature that are trying to bring the lucrative and growing industry to this state. Last year, two bills were introduced in the House of Representatives to loosen the state’s restrictions on sports betting. The first, House Bill 3514, was introduced Representative Russell Ott, and sought to allow online gambling on horse races. Ott stated, “[Equestrians] are getting crushed by other states right now that have gotten with the times, that have passed this type of legislation and have given their constituents and the citizens in their states the freedom to be able to do what so many people are already doing.” His bill passed the House 56-46, but died in the Senate, where it never received a vote.

The second bill, introduced by Rep. Chris Murphy proposed a change to the law that would have allowed online sports betting on both professional and collegiate sports. At the time of its introduction, the law was projected to raise $20 million a year in revenue for the state, with 80% of that money going to the General Fund. At a March 2023 committee meeting on this proposed legislation, Rep. Murphy stated, “Studies have shown that there is about $2.5 billion annually that’s being wagered online in South Carolina illegally,” and that he hoped that this law would end the illegal market for sports betting while providing an economic boost to the state. This bill also was not passed, and died on the floor when the State Legislature’s session ended in May of 2024.

Despite these setbacks for proponents of online sports betting in South Carolina, there are bills currently pending in the House of Representatives that would loosen these restrictions and create a regulatory agency to oversee online sports betting in the state. One such bill, House Bill 3625, the “South Carolina Sports Wagering Act,” seeks to allow major online retailers such as DraftKings to operate in the state after being licensed by the newly-created “South Carolina Sports Wagering Commission.” This commission, comprised of 3 members appointed by the Governor, 3 by the Speaker of the House, and 3 by the President of the Senate, would be in charge of reviewing applications and processing licenses for these companies to open shop in South Carolina. This bill has been reviewed by the South Carolina Revenue and Fiscal Affairs Office who released a “Statement of Fiscal Impact” of this law, if signed by the Governor, on the state. This report states that the proposed 12.5% privilege tax that operators would have to pay under their license would be distributed as follows:
• 82% to the General Fund
• 10% to local governments for infrastructure projects
• 5% to the Department of Mental Health to set up support systems and programs for people who have problem gambling or gambling disorders
• 3% to operate the newly-created gambling commission.
The report further estimates that the revenues from this tax would total between $13.6 million and $31.3 million in the 2025-2026 fiscal year, and between $16.9 million and $39.1 million in the subsequent years. That means, for this year, the General Fund could see a boost of anywhere between $10.88 million and $25.04 million just from the tax imposed under this bill. Local governments could see anywhere from $1.36 million to $3.13 million for their infrastructure needs. As of now, this bill is waiting for a committee vote in the House Ways and Means Committee, and faces staunch opposition from many within the Legislative and Executive branches of the State.

Given the long (again, 1712, the year that the War of Spanish Succession began) history that South Carolina has in trying to stop its citizens from placing bets at the racetrack, in casinos, or on their mobile phones, it is easy to believe that the state will never follow the example that so many of our neighbors have. However, there is momentum within the State Legislature to change these laws and open the doors to online retail gambling within the Palmetto State. So, next Sunday, when you are at your least-favorite co-worker’s house watching the Big Game, and FanDuel subjects you to a minute long tearjerking commercial narrated by Jeff Goldblum, you can download their app to your phone knowing that there is a chance that you will be able to bet on a college football game next season…if the state plays its cards right.