30-second summary:
- Tennessee has traditionally been a conservative state for gambling
- However, there is pressure to legalize sports betting, with a bill tabled for the 2019 legislative session
- Governor Bill Lee has been against expanding gambling, but appears to be changing his tune
- A redesign of the bill with input from the governor’s office is on the way
Move towards legal sports betting
Tennessee is one of those states that has always been very conservative about gambling. However, the success some of neighboring states have been experiencing since sports betting became legal means Tennessee is now looking to get in on the action.
Before the midterm elections in November 2018, there was talk of a sports betting bill in the works. There were some worries that the election of a new governor would be a setback for this bill. The bill’s main sponsor is the Democrat representative Rick Staples, who represents Knox County.
What did the original bill look like?
The original bill proposed a 10% tax on sports betting revenues. The state government would receive this revenue on a monthly basis from the operators.
Should the legislation get approval, it would then be a decision for the: “local communities to then petition their local government with at least 10% of voters calling for a vote on legalizing betting in their area.”
Promoting this bill, Staples said: “Billions of dollars leave the state of Tennessee to our neighboring states with casino and table gambling. So this is a new stream of revenue that the federal government is allowing the states to take advantage of.”
Staples wants a significant portion of the tax revenues from sports betting to go towards education in the state. Memphis city council and the other larger cities in the state will get to decide on the locations for sportsbooks if the bill is passed.
The detailed breakdown of the tax revenue means 40 % will go towards the general fund in the state, 30% going to the local government and 30% going towards tech and community colleges.
Naturally, the bill has opponents. Some are calling for comprehensive studies to examine the potential downsides of legal sports betting, such as whether it will lead to increasing levels of gambling addiction.
The state House and Senate are also under the control of the Republican Party, which traditionally has been conservative on extending gambling laws.
Amending the bill
One of the main obstacles is Governor Bill Lee, who long been outspoken about gambling. When he was campaigning in October before the midterms, he spoke at a debate on the. Lee said he would work hard if elected to stop the approval of any new laws that were pro-gambling.
He thinks there is a strong correlation between crime and gambling. He said: “Organized betting frequently develops into organized crime that we don’t need in our state.”
This is Lee’s first political appointment, so he clearly does not want to cause too much change. It has been said he is now softening his stance on gambling, but wants a say on the final bill.
The WKRN news outlet in Tennessee has reported that the sports betting bill is currently undergoing a redesign. The new version will contain changes from the governor’s office.
The report said: “Governor Lee continues to believe that gambling expansion is not in the best interest of our state. The Lee administration will often 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.”
Changing views
The current Tennessee legislative session finishes in mid-May, leaving little time for the bill to make significant progress.
The new bill will likely be put in front of a committee in the House for a vote. This may help it gain traction. If it does not get a positive outcome from the vote, then it will be on the agenda for the next legislative session.
One potential reason for the change in stance by Lee is the changing opinion of the Department of Justice (DOJ) on the 1961 Wire Act. The DOG opinion is a serious point of contention. Tennessee appears to be supporting New Jersey’s lawsuit against the DOJ. It does not want the DOJ telling states what they can and cannot do in relation to changing gambling laws.