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Tennessee Legalizes Sports Betting

Volunteer State Becomes First To Pass Online-Only Sports Betting Bill

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On Friday, Tennessee became the fourth state to legalize sports betting in 2019.

After Gov. Bill Lee failed to sign or veto HB 1 within the allotted time frame, Tennessee joined Montana, Indiana and Iowa as the four states to legalize the activity this year.

The bill is the first to only allow online sports betting. Other states have legalized online sports betting through separate bills, but they always work in partnerships with brick-and-mortar locations.

The Volunteer State doesn’t have a single casino in the state and Lee is staunchly opposed to gambling in the state. He did, however, let the bill pass through inaction and took to Twitter to explain his thought process.

“I do not believe the expansion of gambling through online sports betting is in the best interest of our state, but I appreciate the General Assembly’s efforts to remove brick and mortar establishments,” Lee’s statement on Twitter read. “This bill ultimately did not pursue casinos, the most harmful form of gambling, which I believe prey on poverty and encourage criminal activity.”

As long as Lee is in office, this will almost certainly be the only type of gambling legally allowed in the state.

“Let me be clear: any future efforts to expand gambling or introduce casinos in Tennessee will assure my veto,” said Lee in his statement.

Tennessee also becomes the first state to force operators to use official data from the leagues. While it hasn’t been addressed specifically in the legislation, it will likely end up with integrity fees paid to the leagues.

Under the law, operators will be paying a $750,000 annual fee and will have their revenue taxed at 20 percent. The bill officially becomes law of the land on July 1, at which point the Lottery commission will begin to draft regulations for the market. It will act as the regulatory body for sports betting.

Initial projections are estimating yearly revenues of $254 million for sports betting operators. Those estimates assume every adult and the 3.5 million tourists will generate about $30 in sports betting revenue. If those figures are correct, the state will take in about $50 million in additional tax revenue.