Raleigh, N.C. — Video gaming competitions would get a major boost in a bill that passed the House Appropriations committee Wednesday morning.
The competitions, under the umbrella of esports, are a fast-growing industry. Large events can bring tens of thousands of fans to arenas to watch teams and individuals compete on giant screens. Purses for the top events have exceeded $20 million for the past several years.
House Bill 945, Esports Incentive Program, would offer a 25 percent refundable tax credit for video gaming event productions – both live and tape-delayed for broadcast – that cost at least $250,000 in qualifying expenses. It would also give $5 million to North Carolina State University for the planning and construction of an Esports Training and Education Center and set aside another $2.5 million for a mobile training and educational unit that could travel around the state.
Rep. Jason Saine, R-Lincoln, said he decided to author the bill after his son, an avid gamer, convinced him back in 2019 to take the family to Queens, N.Y., for a four-day Fortnite World Cup event.
“Probably, if I had to guess, 25,000 people each day in that arena,” Saine recalled. “Moms and dads, spending lots of money and injecting that money into the general area of Queens, New York.
“It occurred to me at that time that this is a lot bigger than I ever imagined. The fact that we would go and literally sit in a stadium to watch kids win $30 million was pretty impressive,” he said.
Saine said he went on to participate in a Call of Duty tournament in Charlotte just before the pandemic hit. He says he often plays online in the evenings with his son and also Charlotte City Councilman Tariq Bokari.
“After being at the legislature,” Saine said, “it’s great to go defeat opponents online in the game and be able to do a little trash talk.”
Esports already has a strong foothold in North Carolina. Epic Games, the Cary-based maker of Fortnite, is making billions of dollars a year and growing rapidly. Gaming centers are doing a brisk businesses in the Triangle and Charlotte. Smaller tournaments happen on a regular basis around the state, and several universities are standing up esports teams much like they would teams for basketball or football.
Aside from the economic impact of the bill, Saine said it would also boost STEM learning and programming among students. Many colleges have or are starting esports programming and design programs.
Saine said he’s unaware of any similar bills pending in other legislatures, so his bill would make North Carolina one of the most esports-friendly states in the country.
“It’s not just about attracting esports, it’s about having something that is already home-grown here in North Carolina, but really all over the world and all over the globe, and attracting more and more people to our state in terms of tourism,” he said, “and in terms of how we see ourselves being kind of cutting edge.”
The bill got a skeptical reception from some. Rep. Jimmy Dixon, R-Duplin, expressed concern that the games are being engineered to be addictive, especially for younger players, while others were wary about the potential cost in tax revenues. The bill doesn’t have a fiscal note – a report on its expected cost – because, Saine said, it’s impossible to know how many tournaments might come here.
“I just know that, in the past, that they have always said, ‘Be careful with the tax credits because they do add up,’ and they are taking funds,” said Rep. Pat Hurley, R-Randolph.
Saine responded that, because the bill is intended to draw big events that aren’t currently in the state, the state wouldn’t be losing any money it’s currently making.
“Without a program such as this, or if others start doing similar programs across the nation and really across the globe, it’ll be an opportunity cost for us because we won’t see it,” he said.
The bill has bipartisan sponsorship. It passed House Appropriations, though not unanimously, and still has several stops before it gets to the House floor.