On Wednesday in Nashville, Tennessee lawmakers voted 58-37 to approve a sports betting bill, sending it to the Senate for consideration, a major step forward in the legislative process.
The legislation, if passed by both chambers and signed by the governor, would make Tennessee the first state in the country with mobile-only sports betting. All other sports betting states have retail books, with some also allowing mobile. Tennessee doesn’t have any casinos. An earlier version was eyeing 50 retail locations statewide, in addition to mobile platforms.
The legislation is sponsored by Rep. Rick Staples (D-Knoxville), who had to defend his bill against heavy criticism multiple times on Wednesday. The bill was pre-filed in November ahead of the 2019 session, just a handful of months after the U.S. Supreme Court kicked the issue of sports betting to the states.
The legislation calls for the mobile sports betting platforms to be regulated by the state lottery. The bill does not allow for any retail sports wagering, even in the form of kiosks.
Tennessee is eyeing a sports betting market worth nearly $150 mm each year in taxable revenues, based off roughly $3 billion in handle. Tennessee would tax sports betting at a 22.5% rate.
Governor is a wild card
Tennesseans elected a new governor in November. Gov. Bill Lee, a Republican, addressed sports betting in the final debate of the race for governor, saying that he’d “work with the legislature to make sure they didn’t approve it.”
“I think that organized betting frequently develops into organized crime that we don’t need in our state,” he added. Lee’s opponent, a former mayor of Nashville, said he would sign a sports betting bill if the legislature put it on his desk. Lee later walked back his comments to some degree by indicating that he could be open to gambling if there was “local decision making.”
The sports betting bill once called for local government approvals, but those provisions were stripped from the legislation during the committee process. It’s unclear if that will dim the chances of Lee’s signature.
It is believed that allowing the experienced state lottery to regulate sports betting will help Lee come on board. That’s opposed to creating a new state gaming commission.
In March, Lee appeared more open to sports betting. A spokesperson said that Lee would “work with lawmakers to improve a bill that impacts the state’s economic and social health, even if it’s not something we plan to support.”
Lee had no prior political experience before becoming the governor.
Tennessee’s session expires on May 15, giving Senate lawmakers less than a month to pass a bill. If the Senate passes a different version, the House would need to sign off on the changes.
The Tennessee Senate has so far seemed more welcoming of sports betting than the House, based on the vote tallies in the committee stage. With that said, there’s no guarantee the Senate approves it.
Later on Wednesday, a Senate committee voted 9-2 to send the bill to the Senate floor.
TN Senate committee votes 9-2 to send the #sportsbetting bill to the Senate floor. Legislation cleared the full House earlier today.
— Brian Pempus (@brianpempus) April 24, 2019
If both chambers come to an agreement on a final version of the bill, it would go to the governor for his signature. The amount of political support the bill gathers in the coming weeks could determine what Lee ends up doing with the measure.