By Brian Murphy, WRAL sports investigative reporter

Raleigh, North Carolina – A years-long effort to legalize online sports betting in North Carolina failed in the General Assembly on Wednesday as the House rejected one of two bills that would legalize the practice in the state.

A watered down version of a bill, Senate Bill 38, won preliminary approval by a single vote, but not before lawmakers removed all college sports betting from the legislation. Meanwhile, the underlying bill, Senate Bill 688, was defeated by a narrow margin, leaving the prospects for sports betting in the state in question.

The 120-member House voted 51 to 50 to approve Senate Bill 38. The House voted against Senate Bill 688 50-51, then blocked an attempt to send it to the rules committee.

The House must give final approval to Senate Bill 38 on a second vote, but as it is written it is dependent on SB 688. The Senate must also take SB 38 for approval before the legislation can be sent to Governor Roy Cooper, who supported the sports game.

“It’s not totally dead,” said Rep. Jason Saine, R-Lincoln, the House’s top sports betting champion.

But Wednesday night was a blow to fans, which include gambling operators and major professional franchises and sporting facilities in the state, including Charlotte Motor Speedway. The Charlotte Hornets, Carolina Panthers and Carolina Hurricanes have been pushing for online sports betting, which they see as an additional source of revenue. Major sports facilities would be allowed under the legislation to open sports lounges.

More than 20 other states have approved online sports betting, including Virginia and Tennessee. Based on the amount of betting in other states, North Carolina was seen as a potential $5-6 billion per year market in terms of betting money.

After the amendments, the bill allows betting on professional sports, esports and horse racing from electronic devices such as computers, tablets and smartphones. The state would allow at least 10 and up to 12 sports betting operators to accept wagers from adults located in North Carolina.

The legislation is a rare measure that has divided the two caucuses with Republicans and Democrats supporting the bills and members of both parties opposing them. SB 688, when passed last year, similarly divided the Senate.

During Wednesday’s House debate, which lasted more than 90 minutes, opponents were much sharper in their criticism. Opponents from both parties have spoken out against the bill, citing the Bible, calling it morally wrong and warning of the heavy social costs associated with legalizing gambling.

“That’s wrong. That’s just plain wrong,” Rep. Abe Jones, D-Wake, said. “You can’t fix what’s wrong because you can’t fix it.”

Said Rep. Pat Hurley, R-Randolph: “It’s not worth putting this on our citizens.”

Rep. John Autry, D-Mecklenburg, was a former associate producer and editor of coaching shows with former North Carolina men’s basketball coaches Dean Smith and Bill Guthridge. He introduced the amendment to ban college sports betting, citing a points-shaving scandal involving North Carolina and the state of North Carolina in the late 1950s and early 1960s.

The House then voted to remove all college sports betting from the bill, a blow to operators in a state known for its dedication to its many college teams. Virginia does not allow betting on in-state varsity teams. But the House amendment would eliminate all college play in North Carolina, even on teams not located in the state.

Earlier in the week, a House committee removed betting on amateur sports, broadly defined as international and Olympic competitions, from SB 38.

And after?

The United States Supreme Court, in a 2018 decision, allowed states to make their own sports betting decisions. Sports betting is legal in North Carolina, but only at the two Cherokee casinos in the far west of the state. In 2019, representatives of sports betting operators, professional teams and tribes came together to start working on mobile sports betting legislation.

Last year, the Senate adopted his version. But the bill moved slowly through the House until this week. Three committees passed the measures on Tuesday and Wednesday, setting up the floor vote on the amended bill. Supporters and opponents said before the vote they expected it to be very close, a rare case of real drama and a lack of certainty for a floor vote.

SB 38 has been tweaked throughout the week, perhaps in an effort to get votes. In a major change, the number of years operators could claim deductions for promotional credits – which allows them to reduce their taxable income – has been reduced from five to three years.

Earlier Wednesday, a House committee amended the bill to add money to the least funded college athletic departments in North Carolina — many of which are historically black colleges and universities — and sports programs for young people in each county from the tax revenues generated by online sports betting.

Saine was unclear on the next steps the supporters would take. He said he would ask that the bill be sent back to committee, possibly to remove language that currently makes it dependent on SB 688.

“We risk ending up with an invoice before the end of the session which will be used for sports betting,” he said. “I do not know yet.”

Other hostile amendments could be proposed, including one that would ban the use of credit cards to open betting accounts. Much of the debate focused on the impact on low-income citizens.

“I fear this will disproportionately affect those who can least afford it,” said Rep. Deb Butler, D-New Hanover. “I feel the same about the lottery too. I see people spending hard earned money so they don’t have to sue something that is engineered and conspires against them. The table always wins. The house always wins.

Rep. Wesley Harris, D-Mecklenburg, was one of the few supporters to speak during the floor debate.

“This is an opportunity that we must not pass up, to do what we can as best we can, to protect our consumers, to protect our citizens,” Harris said. “And we’re going to get side benefits from that as well. So when you put it all together, the good just outweighs the bad for me.”