In Tennessee, legislation that would enable local governments to decide whether to permit sports betting will reportedly be discussed when the 111th General Assembly convenes on January 8th, 2019.

Filed in November by House Representative and Assistant Minority Leader Rick Staples (pictured, right) (D-Knoxville), HB0001 (“Tennessee Sports Gaming Act”) would make sports betting legal in local jurisdictions when approved by local election, according to the news report at the time.

Bill’s intent:

Staples communicated that the bill’s intent is for local governments to gain an additional income source, according to a recent report from News Channel 5 Nashville.

“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 said.

State presence requirement:

Companies offering sports betting services would reportedly need to have a physical presence in Tennessee, however, kiosks could be placed throughout the state for the purpose of collecting people’s bets.

While the intent of the legislation is to help smaller communities within the state, Staples is of the opinion that Middle Tennessee would also be positively impacted.

Representative Staples said…

“Well, it would cause an extra boom in a city like that that would have three professional teams and a lot of the local bars or restaurants. As long as they’re not serving alcohol in the same area that the sports book is, they can generate a lot of income and even more tax dollars.”

Establishment of regulatory body:

According to the current report, under the proposed legislation, a gaming commission would first need to be established in the state. Once established, the commission would work in unison with the Tennessee Bureau of Investigation (TBI) to ensure that establishments are regulated.

Local communities would then need to petition their respective governments, with a minimum of 10 percent of voters requesting a vote on the legalization of sports betting in their area.

Additional legislation:

Staples isn’t alone in his support of legalized sports betting in Tennessee. Back in May, Republican State Senator Brian Kelsey tweeted that he also intended to introduce legislation to legalize and tax sports gambling and is currently drafting his own version of the bill.

Senator Kelsey said…

“I am in the process of drafting a sports betting bill that would generate revenue specifically for preK-12 education.

“I think it is important to have local control over where sports betting takes place, so my bill would allow City Councils in Memphis and the other three large cities to designate areas for physical sports betting locations subject to a vote by the people. Local governments will also have the authority to collect some of the revenue from these physical sports betting locations. I will be discussing the issue with my fellow legislators when we return to Nashville next week.”

Tax revenue distribution:

If passed, the bill would impose a 10 percent tax on revenue from sports betting and could mean a significant source of revenue for both local and state programs. The taxes collected would reportedly be distributed as follows:

  • 40% would go to the state general fund to be appropriated by legislators
  • 30% would go to community and tech colleges
  • 30% would go to local governments, which would be required to use half of the money for their respective school systems and the remaining half for local infrastructure projects

There are those who are against the idea, however, as Governor-elect Bill Lee (pictured below) voiced his opposition to legalized sports gambling while campaigning last year.

Opposition and allocation:

“I think the lottery shows and has had the most negative effect on the lowest-income citizens in our state, and I think that would have the same effect with sports betting. That’s why I’ve been opposed to it,” Lee said during a gubernatorial debate in Nashville,” as reported by WKRN.com in November.

Also commenting on the bill and the need for monies to be allocated to efforts to combat gambling addiction (if passed), Dr. Theodore Bender, Ph.D., Chief Executive Officer at Turning Point in Southaven, part of the Addiction Campuses network based in Nashville, said…

“It’ll be interesting to see if this bill passes if that increases the gambling problem in this country or it just stays the same and the money is just rerouted to different places.

“I would really hope that the lawmakers strongly consider putting money towards mental health and addiction treatment as a way to kind of help people who are struggling with this in the first place.”

Current sports betting landscape:

Since the May 14, 2018, invalidation of the Professional and Amateur Sports Protection Act (PASPA) by the United States Supreme Court, any state that wishes to can legalize sports betting.  To date, a total of eight states have full-scale legalized sports betting, including New Jersey, West Virginia, Rhode Island, Mississippi, Pennsylvania, New Mexico and Delaware, while bills have been passed in Arkansas and New York and Connecticut have put partial laws in place pending further action.

A further five states including Kentucky, Missouri, Ohio, and Virginia have bills pre-filed for this year’s legislative session.