A hearing on Tuesday in Nashville featured the most advanced discussion yet of Tennessee’s sports betting efforts, but some tall hurdles remain ahead of a potential committee vote in the coming weeks.
The legislation, House Bill 1, originally was written for statewide mobile and brick-and-mortar sports betting locations sprinkled around the state. Tennessee doesn’t have any casinos or racinos, so the activity would have been regulated under a new state gaming commission.
That was the situation a mere two weeks ago, before amendments were unveiled last week to change the legislation to mobile-only sports wagering, and instead of creating a new state agency to oversee the gambling, the Tennessee Lottery, which has experience with its own app, would be the regulator.
Backers of Tennessee’s sports betting efforts are eyeing a sports betting market worth nearly $150 mm each year in taxable revenues, based off roughly $3 billion in handle.
Return to retail?
Fast forward to today, and there was discussion about re-adding brick-and-stick sports betting shop provisions to the legislation, as well as the creation of a brand new regulatory body. That pitch came from a Nashville Democrat. The legislation is sponsored by a Knoxville Democrat.
Mobile-only #sportsbetting in TN? Not so fast, says Rep. Powell. He just pushed for restoring the bill to allow b&m sportsbooks as well. Just for the "big cities," which would have the option to decide if they want sports betting. pic.twitter.com/KqreiXODEt
— Brian Pempus (@brianpempus) March 26, 2019
State Rep. Rick Staples, the sponsor, had some complimentary words for his fellow Democrat, but ultimately he disagreed with re-inserting language for retail sportsbooks. Staples doesn’t believe it’s the most effective way for Tennessee to venture into sports betting, given its lack of commercial casino gambling.
Rep. Powell, apparently advocating on behalf of small businesses in the state, argued that the $750k license fee was also too steep. He wanted it lowered to $75k. That change was also rejected by the 19 members of the House State Committee present during Tuesday’s high-stakes debate. Furthermore, a proposal to remove the license cap (currently at 10) was also shot down.
In a win for the legislation, a proposed change to mandate use of official league sports betting data for “live betting” was also rejected at this stage in the process.
Banning betting on holidays, Sundays?
In what could be the most unusual proposed sports betting provision in the country since PASPA was overturned in May 2018, the committee narrowly avoided amending the bill to ban betting on major holidays (Christmas, Easter, and Thanksgiving), as well as on Sundays from 3 p.m. to 10 p.m.
Such a rule would effectively prohibit the bulk of gambling on NFL games, the most popular form of sports betting in the country. No representatives of the Tennessee Titans were present Tuesday to weigh in on the measure.
The amendment, which would have dealt a blow to the legislation, was shot down by a vote of 10 nays to 9 yays. Lawmakers who voted for it could be opposed to sports gambling in general, so that could end up being the final committee vote on the bill.
Committee growing impatient
It’s now fair to say that the legislation is languishing in the committee. It’s been with the State Committee since Feb. 27, and discussions have been tabled multiple times.
Some lawmakers were ready to vote on the bill in its entirety (not just amendments) on Tuesday. However, others said that it would be premature to hold the vote now.
One Republican became pretty displeased with what he was seeing:
"Let's quit wasting everyone's time and vote [on the sports betting bill], like we are supposed to do," lawmaker says ahead of 13-6 vote to move HB 1 to "heel of calendar." Now unclear when/if bill will be voted on. Not a great day for TN's 2019 #sportsbetting efforts. pic.twitter.com/bjYOVoKvAH
— Brian Pempus (@brianpempus) March 26, 2019
Ultimately, 13 committee members voted to delay a vote, which Staples was accepting of after the tense debate. The “heel of the calendar” means that the legislation moves to the back of the line. As of Tuesday, there were 23 bills in total on the State Committee’s calendar.
How fast will the committee move through the bills? It’s hard to tell, but on Tuesday the committee tackled just three of the bills, including the sports betting proposal. The slow pace on display might be a little misleading considering how complex the sports betting efforts are.
Tennessee’s ongoing legislative session ends in mid-May, so the window is quickly closing for the state to pass the bill this session. Sports betting proponents also have to deal with a governor who isn’t fond of state-sanctioned gambling, though reports indicate he is warming to the idea.
Despite the progress made in 2019, it’s looking like 2020 is a better bet for Tennessee sports betting passage.
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