On Friday, Tennessee became the fourth state to legalize sports betting this year.
Tennessee Governor Bill Lee returned the sports betting bill, HB 1, without his signature allowing the bill to become law.
When HB 1 was sent to Lee for final approval, he said that he would allow the bill to become law without his signature as he does not support the expansion of gambling.
On Friday, Lee issued a statement outlining his reasons for not signing the bill.
Lee said: “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. This bill ultimately did not pursue casinos, the most harmful form of gambling, which I believe prey upon poverty and encourage criminal activity.
“Compromise is a central part of governing, but I remain philosophically opposed to gambling and will not be lending my signature to support this cause. We see this issue differently but let me be clear: any future efforts to expand gambling or introduce casinos in Tennessee will assure my veto.”
What’s does the sports betting bill cover?
HB 1 legalizes state-wide online and mobile sports betting and will allow punters to wager via remote kiosks in the state.
Operators will be required to pay $50,000 to apply for a sports betting license and a further $750,000 to secure a sports betting license, these will need to be renewed on an annual basis.
In terms of taxation, operators will be taxed 20% on their sports betting revenue.
The state lottery will begin the rule-making process once the bill comes into effect on 1 July 2019.
The first bill of its kind
Tennessee’s sports betting bill is unique in the sense that it only legalizes online and mobile sports betting, not land-based sports betting. This marks a first for the US sports betting market.
Although other states have legalized online and mobile betting, those states have authorized land-based sports betting at casinos.
It’s important to remember that there are no casinos in Tennessee, so it makes sense that the state would legalize online betting only.
The bill also contains provisions that empower major sports leagues to request restrictions on certain bet types, another first in the US. On top of this, Tennessee’s bill states that operators will be restricted to using official data sources for in-play sports betting, allowing the major leagues to monetize their sports data.
This marks the first time the major sports leagues have been given an element of control over sports betting in the US.
With the high tax rate, licensing costs and the element of control granted to the sports leagues, Tennessee’s sports betting model could be fairly off-putting for US sports betting operators hoping to serve the state.
A launch date has yet to be set for online betting in Tennessee.
Elsewhere in the US, DraftKings is preparing to launch its sports betting app in West Virginia.