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The state of South Carolina is still one of the last remaining frontiers in sports betting and iGaming in America. While multiple neighbouring states, particularly North Carolina, have turned iGaming and sports betting into multi-billion dollar, legally regulated businesses, South Carolina remains an extremely conservative state based on long-standing historical and religious views. As of February 2026, no iGaming or mobile sports betting is legally allowed in the state of South Carolina.
The state of North Carolina is at a pivotal moment in its legislative process. Re-introduced to the North Carolina General Assembly in the 2025-2026 Legislative Session were several high-visibility bills aimed at making North Carolina one of only 11 holdout states with respect to the legalization of cannabis. The narrative about cannabis is changing from being a “moral vice” to an “economic necessity.” The state has lost millions of dollars in tax revenues to taxes and fees that would have been collected from cannabis sales if the state’s laws were not prohibitive. This report provides a summary of the current landscape and barriers to entry, and examines the high-stakes legislative battles that will define the future of the cannabis market in North Carolina.
Table 1: South Carolina Legal Gambling Key Performance Indicators (FY 2025)
| Metric | Value (FY 2025) | Annual Growth/Change |
|---|---|---|
| Total Lottery Revenue | $2.45 Billion | +4.2% |
| Net Education Contribution | $546.8 Million | +3.1% |
| Highest Grossing Product | Instant Scratch-Offs | 14.5% segment growth |
| Avg. Monthly Spend per Player | $20.50 | +$1.15 YoY |
| Retailer Network Size | 3,900+ Locations | Stable |
Market Overview
A historical reluctance to adopt commercial gaming has created an interesting dynamic for iGaming in South Carolina. The demand for iGaming from South Carolinians is very high, considering the state’s extensive history of gambling activity and the presence of a billion-dollar state lottery. On the other hand, South Carolina residents are spending tremendous amounts on gaming-related activities in North Carolina, which has legalized mobile sports betting as of 2024 and is starting to generate revenues through this new industry.
Market Size and Economic Impact
While online casinos and sportsbooks are currently prohibited, the state’s appetite for wagering is evidenced by the performance of the South Carolina Education Lottery (SCEL).
- Total Annual Revenue: In Fiscal Year 2025, the SCEL reported total game revenues exceeding $1.3 billion.
- Net Education Contribution: For the fifth consecutive year, the lottery transferred more than half a billion dollars ($546.8 million) to state education accounts.
- Growth Rate: The market for instant-win games (scratch-offs) saw a 14.5% increase in the most recent audit cycle, signaling a shift toward high-frequency, “instant gratification” gaming products.
- Estimated iGaming Potential: Industry analysts from the Tax Foundation project that a regulated sports betting market alone could generate a handle of approximately $320 million annually, yielding $32 million in tax revenue at a standard 10% rate.
Popular Game Types
The South Carolina market is currently skewed toward traditional “drawing” and “scratch” products, but the demand for digital alternatives is rising.
- Scratch-Off Tickets: These remain the dominant product, accounting for the lion’s share of retail sales.
- National Jackpot Games: Powerball and Mega Millions experience massive surges in participation during high-jackpot cycles, with 61% of residents reporting engagement during billion-dollar draws.
- Cross-Border Sports Betting: With the 2024 launch of mobile sports betting in North Carolina, geo-fencing data indicates that a significant number of South Carolinians travel across the border to place bets on collegiate and professional sports, particularly during the NFL season and “March Madness.”
- Skill-Based Gaming: A grey market for “skill games” persists in retail environments, with Senate Bill 362 introduced in 2025 to clarify the legality of games where skill predominates over chance.
Player Demographics and Preferences
The South Carolina player is remarkably loyal, with approximately 73.4% of adult residents having played a lottery game at least once.
| Category | Demographic Profile |
|---|---|
| Active Age Groups | The highest spending is concentrated in the 35–44 and 65+ brackets. However, 31% of adults aged 18–29 express the highest interest in mobile sports betting. |
| Spending Habits | Current lottery players spend an average of $20.50 per month, a figure that has risen steadily over the last decade. |
| Gender & Ethnicity | Participation is nearly split by gender, though male residents show a higher propensity for sports-related wagering. There is particularly strong engagement among African American and lower-to-middle-income households. |
| Technology Usage | 80% of active gamblers in the region now prefer mobile interfaces. A key barrier to growth in the state is the current “cash-only” or “debit-restricted” nature of the lottery; 33% of players report they would play more frequently if mobile payment methods were integrated. |
Regulatory Landscape
Within the United States, gambling law is very highly restrictive in the state of South Carolina. There is a long history of strong opposition to any type of commercial gaming in South Carolina. The SC Education Lottery, or “SCEL”, is actually the only “commercial” gaming activity with a legislative framework that is somewhat acceptable under South Carolina law.
Currently, as of February 2026, there are two major legislative expansion bills being debated and weighed against a strong wall of Executive opposition in order for the legislature to be able to expand its gambling laws.
Overview of Existing Regulations
South Carolina’s gambling laws are established through Article XVII, Section 7 of the State Constitution and by Title 16, Chapter 19 of the Code of Laws. The law prohibits lotteries/games of chance with very little exception (see Code Minimum $1) unless specifically authorized by the General Assembly.
- Activities Available: State-sponsored lottery, Charitable Bingo, & Daily Fantasy Sports (DFS), all allowed, with DFS still existing in a grey area because there are no laws prohibiting this activity.
- Activities Considered Prohibited: Online Casinos (iCasino), Mobile Sports Betting, Commercial (brick and mortar) Casinos, and Pari-Mutuel Wagering on Horse Racing.
- “Frictionless” Debate: As AG Wilson has pointed out on numerous occasions, Mobile iGaming presents a higher level of risk than the retail formats due to its 24/7 access through smartphone technology – thus classifying it as “frictionless gambling.”
Licensing Authorities and Requirements
Currently, the South Carolina Education Lottery Commission is the primary regulatory body. However, 2026 legislative proposals aim to create new, specialized oversight entities:
- South Carolina Sports Wagering Commission (Proposed under SB 444):
- Scope: Would oversee up to 8 mobile sportsbook licenses.
- Operator Qualifications: To ensure market stability, applicants must already hold licenses in at least five other U.S. jurisdictions.
- Fees: A non-refundable $100,000 application fee and a $1 million initial licensing fee, valid for five years.
- South Carolina Gaming Commission (Proposed under HB 4176):
- Scope: A three-member panel appointed by the Governor, Senate President, and House Speaker to oversee land-based casino development along the I-95 corridor.
Taxation and Compliance Details
The fiscal framework for proposed iGaming and sports betting expansion is designed to be competitive yet lucrative for the state’s general fund.
| Feature | Proposed Sports Betting (SB 444) | Proposed Casino (HB 4176) |
|---|---|---|
| Tax Rate | 12.5% on Adjusted Gross Revenue | 15% on Gross Gaming Revenue |
| Deductions | Allows for promotional credit deductions | No significant promotional offsets |
| Minimum Age | 18 years old (Lottery standard) | 21 years old |
| Revenue Use | General Fund, First Responders, Addiction Treatment | 35% dedicated to SC Conservation Bank |
Upcoming Changes in Legislation (2026 Session)
The 2025-2026 legislative session is more active than it has been in decades. There are currently two major bills being discussed:
- Senate Bill 444: This is the primary way to do mobile sports betting; it was heard in the Senate Labor, Commerce & Industry Committee in February 2026. Supporters say it would recover all of the millions of dollars going to the regulated market in North Carolina that are lost in sports betting now.
- House Bill 4176 (I-95 Economic & Education Stimulus Act): This bill was sent back to the Ways and Means Committee at the end of January 2026, and it would create commercial casino hubs in the “Tier IV” counties of Orangeburg, Marlboro, and Dillon.
The McMaster administration is a major obstacle to these bills. Governor Henry McMaster has stated that the “negative effect far outweighs any marginal financial gain,” and that any bill passing would likely need to achieve a two-thirds supermajority to not be vetoed.
Competitive Landscape
As of now, the competitiveness of the mobile industry in South Carolina is being played out predominantly by way of large national companies and smaller regional companies with a real commitment to tribal interests. Currently, there is no legal access for private mobile operators in South Carolina; however, there is competition for future market share through intense lobbying and positioning at the State House and other locations.
Key Market Players
If SB 444 or HB 4176 passes, the market will be restricted to a select group of “tier-one” operators. The current legislative draft requires any applicant to hold licenses in at least five other U.S. jurisdictions, effectively creating a high barrier to entry that favors established international and national brands:
- DraftKings & FanDuel: These “Big Two” already have a massive footprint in South Carolina through Daily Fantasy Sports (DFS), which operates in a legal grey area. They hold a combined national market share of approximately 63% and are leveraging their existing South Carolina user databases to lobby for full sports betting legalization.
- BetMGM & Caesars Sportsbook: These operators are positioning themselves as the “responsible” alternatives, emphasizing their robust compliance frameworks. Caesars has been particularly active in 2026 hearings, testifying on the prevalence of the offshore market.
- The Catawba Indian Nation: A critical local player, the tribe operates the Two Kings Casino in Kings Mountain, NC (just across the border). They are a primary contender for any future tribal-state compacts within South Carolina and are expected to launch a permanent “Introductory Casino” in late March 2026, which will draw significant traffic from South Carolina residents.
Table 4: Competitive Landscape – Projected Market Leaders
| Operator | Current SC Presence | Competitive Advantage | Target Demographics |
|---|---|---|---|
| FanDuel | Active DFS Market | High Brand Recognition; NC Synergy | 21–35, Mobile-First |
| DraftKings | Active DFS Market | An extensive existing SC database | Sports Fans, Male-heavy |
| BetMGM | Brand Awareness | High-end VIP & Loyalty Integration | High-Income, Casino-curious |
| Catawba Nation | Two Kings Casino (NC/SC border) | Local Tribal Compact potential | Residents, Retail-first |
| Caesars | Active Lobbying | Focus on Responsible Gaming (RG) tech | 45+, Multi-state travelers |
Market Share Distribution (Projected)
Industry analysts project a highly consolidated market structure similar to North Carolina’s 2024 launch:
- Top 3 Operators (FanDuel, DraftKings, BetMGM): Expected to capture 80–85% of the total handle.
- Remaining 5 Licenses: Likely to be contested by “challenger” brands like Fanatics Sportsbook, bet365, and ESPN BET, focusing on niche demographics and aggressive promotional spend.
Partnerships and Strategic Alliances
Success in South Carolina will depend on “localizing” the gaming experience. Key alliances forming in 2026 include:
- Professional Sports Integration: A 2026 amendment to SB 444, proposed by Senator Josh Kimbrell, seeks to dedicate two of the eight available licenses specifically to the PGA Tour and NASCAR. This would solidify South Carolina’s status as a hub for golf and motorsports betting.
- The “Cheves Group”: Developer Wallace Cheves remains a central figure in the alliance for HB 4176, tying casino development to high-profile economic revitalization projects along the I-95 corridor.
- Conservation & Veterans Alliances: In a unique strategic move, pro-gambling lobbyists have partnered with the S.C. Conservation Bank and Veterans’ Trust Fund, proposing that 65% of total tax revenue be split between these two popular causes to neutralize religious opposition.
Consumer Trends
Currently in South Carolina’s marketplace, consumers engage with digital products in an almost “shadow-like” fashion. As a state that is still largely based on law, consumers are now more and more mobile-first, technology-oriented, and influenced by the normalization of gaming within the surrounding states, as they are from their local state’s laws and regulations.
Player Behavior and Preferences
While South Carolina does not have any mobile options within the state, residents of the state are active participants in regional gaming economies.
- Cross-Border “Leakage”: As of early January 2026, over 415,000 South Carolinians currently have active betting accounts in neighbouring states such as Tennessee and North Carolina. Bettors in South Carolina frequently cross state lines to place bets, with the practice being particularly widespread during football season and college rivalries.
- Collegiate Loyalty: Local sporting culture plays a significant role in the market, with industry stakeholders confirming that gaming activity peaks substantially during Clemson University and the University of South Carolina sporting events. In response to this phenomenon, many legislative proposals have been submitted requesting the ability for residents to place wagers on their local collegiate teams, which is much less restrictive than many other states’ restrictions.
- “Skill Game” On the Rise: There is an increase in consumer activity in retail environments where manufacturers are producing machines that require “skill,” rather than just chance. Senate Bill 362 (2025-2026) was drafted in response to an increase in consumers asking for machines where “skill predominates over chance”.
Payment Methods and Technological Trends
The lottery in a state without an established iGaming market will provide the best barometer for the implementation of payment technology.
- There is demand for digital wallets, as evidenced by survey results, where 1/3 of respondents indicated they would play more often if they could use mobile payment systems such as PayPal, Venmo, or Apple Pay.
- The use of “Pay by Bank” technology (direct-to-account transfer) has a strong growth trend from a national standpoint, where operators have shown high interest in this area. Operators are drawn to this payment method due to the perceived security and instant ability to withdraw funds, which is a requirement for establishing trust with 90% of today’s users.
- Although they are not yet legally recognized, the 2026 legislative drafts (including SB 3625) also attempt to define cash equivalents for compliance purposes with respect to digital and virtual currencies. This signals the intention of lawmakers to facilitate digital and virtual currency use appropriate for the future.
Social and Cultural Influences
The gaming landscape in South Carolina is characterized by a conflict between traditional Southern morals and economic viability.
- Religious and ethical skepticism play a large role in the debate over iGaming’s viability. The efforts of organizations such as the Palmetto Family Alliance to portray iGaming as a “frictionless” threat to society have significant impacts on the perceptions of society’s most affected demographic (i.e., young males aged 18 to 29) and thereby keep the issue of “Responsible Gaming” (RG) at the forefront of legislative discussions surrounding the iGaming industry.
- The emergence of the “conservation” pivot is another way of addressing moral opposition to gambling in South Carolina. Through promoting a requirement that 35% of casino revenue be used to fund South Carolina’s Conservation Bank, pro-gambling advocates have been able to reframe the issue of gambling from “vices” to tools for “preserving rural communities and protecting working farms” that hold symbolic value in the hearts of the majority of South Carolinians who live in rural areas.
Opportunities & Challenges
Opportunities
- Low Level of Competition: There are only a couple of states left (the so-called “dark” states) where an operator has the opportunity to become the “first” operator on the market; this creates huge advantages for the eight applicants.
- Loyalty to College Football: The passion for the SEC and ACC college football teams creates a large potential customer base for sports wagering.
- North Carolina Revenue Loss: The potential revenue loss to North Carolina serves as an excellent political tool that operators can use as leverage in lobbying efforts.
Challenges
- Executive veto: The governor has been a persistent anti-veto advocate for as long as he has been in office. Therefore, any legislation passed out of the General Assembly has a very low probability of receiving the governor’s signature and will require two-thirds of each chamber to overturn that veto.
- Political succession: 2026 will see an election year with possible candidates such as Josh Kimbrell, who supports legalization; however, the two leading candidates for governor (Alan Wilson) oppose it, and this results in uncertainty for legalizing cannabis in South Carolina.
- Social opposition: The Palmetto Family Council believes the social impact of drug abuse and crime will exceed the projected $60 million that would be generated from taxing cannabis.
Table 5: SWOT Analysis of the South Carolina iGaming Market
| Strengths | Weaknesses |
|---|---|
| – Massive “built-in” collegiate sports fan base. | – Heavy executive opposition (Governor McMaster). |
| – High lottery participation rates. | – Restrictive historical “Blue Laws.” |
| – Proven revenue model in neighboring NC. | – Requirement for high initial licensing fees. |
| Opportunities | Threats |
| – Recapturing “leakage” from NC and Georgia. | – Potential for a gubernatorial veto in late 2026. |
| – Strategic “Green” alliances (Conservation). | – Proximity to illegal offshore “grey” markets. |
| – Integration with NASCAR and PGA events. | – Political volatility in an election year. |
Conclusion & Recommendations
The iGaming and sports betting industry in South Carolina is like a “sleepy giant” still waiting to be awakened. So far, about iGaming or mobile sports betting associated with the iGaming, there is currently a strong political opposition to establishing either in South Carolina, as evidenced by the failure of legislation to create the opportunity for these activities. However, the introduction of SB 444 and a push by the neighboring states to develop their gaming laws have brought this issue to the forefront of South Carolina’s legislature, with much discussion and debate expected during early 2026.
Strategic Recommendations
- Lobbying on ‘Revenue Retention’: Instead of using the term ‘gambling expansion’ in messaging, lobbyists should change the narrative to ‘revenue recovery,’ emphasizing that operators are losing money to the state of North Carolina.
- Focus on ‘Green’ Partnerships: Supporting legislation that links gambling revenues to well-liked initiatives (e.g., conservation initiatives with a 35% match) is the best way to influence rural Republicans’ votes.
- Prepare for a 2027 Entry: Due to the 2026 election cycle and current committee deadlocks, an integrated market site for sports betting won’t happen until 2027. Investors should develop long-term relationships with members of the General Assembly.
Future Outlook
Before comprehensive Internet gambling (like an online casino) becomes legal in the “Palmetto State,” sports betting is probably going to be legalized soon. Even if sports betting were to be legalized by 2026, there is economic pressure on the legislature to act now due to neighboring states’ actions, and thus, legalization of sports betting is a certainty; the only uncertainty is whether this administration or the next administration will be the one to sign such legislation.
Data and Sources:
- South Carolina Education Lottery (SCEL): Official financial reports detailing the $546.8 million raised for education in FY 2025 and total game revenues exceeding $1.3 billion.
- South Carolina Office of the State Auditor: The FY 2025 Financial Report for the Education Lottery Commission, providing audited data on scratch-off growth and player payouts.
- South Carolina Legislature Online: Full text and history for Senate Bill 444 (Sports Wagering) and House Bill 4176 (I-95 Casino Act), including the 2026 session status.
- U.S. Census Bureau: Data on the surge of state tax revenue from sports betting in the Southeast region and the “seasonality” of wagering trends through 2025.
- Tax Foundation: Economic analysis and projections for the South Carolina sports betting market, including the $32 million annual tax revenue estimate.
- Gambling Insider: Detailed coverage of the 35% Conservation Amendment and the legislative strategies used to sway rural lawmakers in early 2026.
- American Gaming Association (AGA): “State of the States 2025” report, providing context on North Carolina’s launch and its impact on South Carolina consumer behavior.
- Catawba Two Kings Casino Updates: Direct progress reports on the March 2026 opening of the introductory casino and its strategic position near the SC border.
- AffPapa iGaming Intelligence: Reporting on the $665.9 million betting handle in neighboring North Carolina (December 2025), which serves as a benchmark for SC potential.
- FastDemocracy: Real-time tracking of H. 3353, the joint resolution proposing a constitutional amendment to allow the General Assembly to authorize gambling.
- National Today: Local reporting on the February 19, 2026, committee debates and the ongoing opposition from the Governor and Attorney General.
