The plan to legalize sports betting in Tennessee cleared one of its first obstacles last week when a House subcommittee advanced the measure. This marked the first major development for the legislation since it was pre-filed in November of 2018.

House Bill 1, as the legislation is known, would allow for mobile betting across the Volunteer State, as well as at brick-and-mortar sports betting locations. However, Tennessee does not have casinos or horse racing tracks. As a result, sports betting would be located at retail shops, as opposed to traditional sportsbooks. As a matter of procedure, sports betting approval would be subject to local referendums.

One major complication for the bill is the governor’s broad stance on anti-gambling. “I think that organized betting frequently develops into organized crime that we don’t need in our state,” said Governor Lee.

Although, putting the issue of legal sports betting up to local communities could remove the concern from the governor’s plate.

Tennessee lawmakers are looking to authorize mobile and online sports wagering as well. Most would agree that mobile and online sports betting is likely to increase handle across the state, due to both convenience and the ability to reach a full market. However, state lawmakers are considering a provision that wouldn’t allow for sports bettors to register an account remotely.

“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, the state that is currently the king of sports betting, outside of Nevada, allows for remote registration across the state. Pennsylvania will do the same once its mobile betting launches. Limiting online sports betting registration to in-person could hinder revenue in Tennessee, but will result in more security and authenticity of its gamblers.

Tennessee projects $148.7 million in annual revenue for licensed sports betting operators. A number that would be easier to hit with remote registration for online betting. With the proposed tax rate of 10%, the state is projecting nearly $15 million a year in tax revenue.

The state is expecting at least 50 retail sports betting locations, with an annual licensing fee of $375,000.

In a state where most gambling is illegal, including casinos, sportsbooks and even bingo, legalizing sports betting would be a huge step for Tennessee. This puts the state in a rare position to have sports betting as the only legal means of major gambling for its residents, something that could certainly help push sports betting revenue through the roof.

“When it comes to casino gambling, table gambling the state of Tennessee is upwards of losing $3 billion dollars annually because of our neighboring states,” said Representative Rick Staples.

Staples says that sports betting is a new form of revenue for the states that doesn’t involve raising taxes. “A percentage that would go to K through 12 and a percentage that would go to the general fund; but for locals, they would have dollars that would go to education as far as career training and technical training,” he said.

30 percent of the revenue would go towards K-12 education and local infrastructure.

“We have a lot of bordering states that already passed this piece of legislation,” said Staples.

Nearby states such as Mississippi and West Virginia already offer legal sports betting, while states like Arkansas and Kentucky have legislation in the works.

The bill would create the Tennessee Gaming Commission, which would consist of nine members and would be responsible for the enforcement of the rules if the bill becomes a law.

The proposal would allow for local jurisdictions to determine if they want to bet on professional sports teams in the state.

The reality is that sports betting is already happening across the country, both legally and illegally. For someone like Representative Bill Beck, it makes sense for the state to legalize sports betting and benefit from it, as opposed to letting illegal sportsbook make all the money. “So we really have the choice of capturing that tax revenue from that sports book, or letting those companies, that are operating illegally throughout the United States capture that revenue,” said Beck.

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