Tennessee Passes SB16 to Legalize and Regulate Sports Betting

Tennessee recently joined a host of other states in legalizing sports betting, but the way in which it happened in the Volunteer State is much more complicated than it was elsewhere. After plenty of fiery debate, failed amendments, and other twists, Tennessee passed SB16 which allows for legal and regulated online sports betting.

Before we go any further, it is important to note that while sports betting is now legal in Tennessee, it is strictly legal only in the online sphere. This, amongst a host of other things, is what makes the situation in Tennessee so unique.

How it Happened

The bill that made sports betting legal in Tennessee is known as SB16 and was first introduced not too long ago, in December of 2018. By the end of April, the bill was in front of the Tennessee Senate where it was the subject of a lot of opposition from both sides of the aisle.

Some of the opposition came from Republican State Senator Mike Bell who voiced his doubts regarding the estimated tax revenue expected to be generated, which is in excess of $50 million. He and other lawmakers claimed that the $50 million mark was nothing more than wishful thinking. Others who opposed the bill cited that creating an accepting atmosphere for sports betting would contribute to gambling addiction in a state that is already plagued with addictions of all types.

While these arguments were heard time and time again, the Tennessee House of Representatives voted 58-37 to move the bill onto the Senate floor. When SB16 reached the Senate, the process was a bit more streamlined and it passed by a 19-12 vote.

State Representative Jason Powell was one of the Democrats who opposed SB16 and attempted to amend the bill on multiple different occasions and in many different ways. One of the biggest amendments Powell tried to introduce was one that would allow the state’s four largest cities to hold votes on whether they would allow for brick-and-mortar betting locations or not. After all, SB16 legalizes online sports betting only. In addition to that amendment being brushed aside, Powell was also unsuccessful in introducing an amendment that would reduce the sports betting licensing fee from $750,000 to just $75,000.

Though the bill passed through both the House and the Senate, Governor Bill Lee has made it clear that he does not support gambling. With that in mind, there were feelings that the bill would ultimately be vetoed by the Republican governor, but such will not be the case.

Though Governor Lee does not support gambling, his assistant, Laine Arnold, expressed his feelings when she said, "The governor has said he does not believe that the expansion of gambling is best, but he recognizes that many in the legislature found this to be an issue they want to explore further. He plans to let this become law without his signature."

What Happens Next?

Even though Governor Lee plans to let this bill become law by way of a loophole of sorts, this does not mean Tennesseans can immediately log in and begin placing bets right away. As it stands, it is expected that wagers will be able to be made starting on July 1.

As in most every other state, you must be 21 years of age in order to wager, however there was not much mention of how online sites will verify that bettors are of age. In fact, there is very little known about how the actual act of betting will be carried out - whether there will be downloadable applications, websites, or something else.

Sportsbook operators will be charged an annual licensing fee of $750,000 and will see all revenues taxed at a 20% rate. The taxes generated from sports betting are going to be set aside for education, local governments, and gambling addiction services.

Finally, there will be a nine-person committee tasked with the regulation of the sports betting industry. This committee will exist as an extension of the state’s lottery commission and ultimately hold operators in line and provide innumerable protections for bettors.

Tennessee a Sleeper Sports Betting Giant?

Though there have been plenty of doubts cast on the estimated tax revenues that are going to be brought in, they may be unfounded. The reason we say this is due to the fact that Tennessee is in a unique situation now that they have legalized sports betting.

Unlike Pennsylvania, which is bordered by two other states that allow sports betting, Tennessee is not. Of Tennessee’s eight direct neighbors, the only one that allows sports betting is Mississippi. This means that there is the potential for a flood of people from states like Missouri, Alabama, Georgia, and North Carolina to travel to Tennessee in order to place legal, regulated wagers. This alone could create even more revenue through taxation than was originally forecast.