A plan to allow sports betting in Tennessee cleared an early hurdle on Wednesday when a House subcommittee advanced the measure. It was the first significant development for the legislation since it was pre-filed in early November.
The legislation, House Bill 1, would allow mobile wagering statewide, as well as at brick-and-mortar sports betting locations. But the state doesn’t have casinos or horse racing tracks, so the retail shops would not be traditional sportsbooks. And as a matter of procedure, sports betting approval would be subject to local referendums.
The sports betting votes could occur under a special election or concurrently with a general election. The legislation itself would more than likely not require a referendum for a constitutional amendment, according to an analysis from the state’s attorney general.
There was a comment made during the Departments & Agencies Subcommittee meeting that mobile wagering could actually begin before the local government decisions. Sports Handle was unable able to reach the sponsor of the legislation, state Rep. Rick Staples, a Democrat, for clarification.
The bill, which is expected to have an identical companion bill in the Senate, was described Wednesday as a “work in progress.”
More details are expected to emerge when the full committee brings up the measure, as early as next week. The 2019 session for the Tennessee General Assembly is slated to end in mid-May. A complication for the bill is the governor’s broad anti-gambling position, but putting the issue up to local communities could alleviate the Republican governor’s concerns.
No remote registration (as of now)
Although lawmakers are seeking to authorize bets over the internet, which is what most sports bettors prefer and would allow the state to reach full market potential, the lawmakers are currently considering a provision that would not allow for bettors to register remotely to establish accounts.
“Prior to placing a wager with a licensee through a remote kiosk or via interactive sports wagering, a bettor shall register with the licensee in person and attest that the bettor meets the requirements to place a wager with a licensee in this state,” reads a provision in the 23-page gambling bill.
New Jersey‘s steadily rising mobile sports betting market does allow for remote registration by residents (or transients entering New Jersey) across the state, and Pennsylvania, once mobile goes live, will do the same.
Tennessee would stand a much better chance to achieve its projection for $148.7 mm in annual revenue for licensed operators, if it were to allow remote sign-ups. Based on the proposed tax rate of 10%, the state is eying nearly $15 mm a year in tax benefits from a mature industry. Assuming a hold percentage of about 5%, Tennessee is expecting about $3 billion in annual handle.
The state is also eyeing an additional $375,000 annually in the form of licensing fees. The state projects there to be at least 50 retail sports betting locations, which would combat the state’s problem of only “moderate access to high speed internet in Tennessee,” according to a fiscal note.
Highlights of Tennessee HB 1
- Mobile Betting? Yes
- In-person registration required? Yes
- Tax rate: 10%
- Annual license fee: $7,500
- Legal to bet on college games?: Yes
- Fee to pro leagues: No
- Use of “official league data” mandated?: No
- Regulatory body: Tennessee Gaming Commission
- Where the money goes: General Fund