• House Bill 1 would legalize sports betting in TN.
  • The bill was amended to exclude provisions for land-based betting.
  • Legal Tennessee sports betting would be available online and via automated kiosks only.

NASHVILLE, Tenn. – After a contentious debate focusing primarily on the risks of gambling addiction, the Tennessee House of Representatives on Wednesday passed HB 1 by a vote of 58-37 (with two abstentions).

If passed by the Senate, the proposal would create the Tennessee Sports Gaming Act, legalizing sports betting in the state. Compliance would be administered by a newly-formed Tennessee Gaming Commission.

HB 1 was initially a comprehensive sports wagering omnibus, but its application has been stripped back slightly via amendment. Still, the bill would legalize sports wagering and potentially make it accessible to all residents aged 21 years old or older.

The bill would approve wagering on US and international sporting events, and it would also allow for wagering on pro-am events like the Olympics. NCAA betting would also be allowed, with no in-state team restrictions.

That said, HB 1 would not immediately make sports wagering a legal pastime in Tennessee upon passage. Instead, taking a cue from Louisiana to the south, the bill would allow residents of each local municipality to vote on whether or not sports wagering would be allowed to be offered in their area.

Communities that decide not to allow Tennessee sports betting would be geofenced out of the app(s) that will power the state’s sportsbook(s). Tennessee’s proposed online wagering platform is unique in this regard, as it seeks to create the US’ first intrastate geofenced Internet betting product.

What Was Stripped From The Sports Betting Bill

The biggest difference between HB 1 as submitted to the House floor and the version that made it through passage this week is that the current iteration bans land-based brick-and-mortar sports wagering.

In other words, there will be nowhere that a bettor can venture to actually place their wagers in a real sports betting lounge.

Of course, given the fact that there are no commercial or tribal casinos in Tennessee (gaming being limited to a few horse tracks and a state lottery), this makes sense. Requiring the development and construction of retail venues to accept sports betting could have been a poison pill for the bill.

That said, a form of retail wagering remains on the table, as electronic betting kiosks will be permitted to be used on operators’ premises.

By limiting legal sports betting in Tennessee to online venues and the occasional kiosk, the product will be able to launch sooner, attract more customers, and provide a convenience factor to bettors that other solutions might actually limit.

What Remains In The Sports Betting Bill

The rest of HB 1 has undergone minor changes and adopted a few amendments in its run in the House, but there have been no alterations as impactful as the above.

For the most part, the bill’s remainder simply sets the tax rates and licensing fees for the industry.

In order for any potential sportsbook operator to do business in the state, a non-refundable application fee of $50,000 must be paid, and the yearly renewal fee is $650,000 for Tennessee-based companies and $750,000 for brands that carry on their principal activities outside of the state.

There is no limit or cap on the number of sports wagering licenses that may be issued.

Under HB 1, sportsbook revenues would be taxed at a rate of 22.5 percent. These monies would be distributed to various state funds, including those based on education initiatives, infrastructure construction, nonprofit assistance, and other government grants.

Tennessee Gov. Bill Lee (R) is opposed to expanded gambling in the state, including sports betting legalization. However, if HB 1 passes the Senate as expected, indications are that Lee will not veto the bill.

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