A bill that would drastically change taxes for Tennessee sports betting operators is one step closer to becoming law.
Lt. Gov. Randy McNally, who serves as the Senate speaker, signed Senate Bill 475 on Wednesday. His signature is one of two needed before the measure can go to Gov. Bill Lee for his consideration.
House Speaker Cameron Sexton has yet to sign the bill.
SB 475 passed in the state House on April 21 by a 75-7 margin. That same day, the Senate concurred on two amendments the House included in the bill.
New Law Would Be a First in Nation
If SB 475 becomes law, the 20% tax the state levies on Tennessee sports betting app operators will disappear. In its place, the state would enact a 1.85% tax on the handle, or the amount wagered.
Tennessee would be the first state to tax operators by handle.
The new rate could mean the state would see less revenue.
Last month, the Tennessee Sports Wagering Advisory Council reported the state received $8.8 million in taxes based on the $43.7 million in revenues the licensed sportsbooks generated in March.
If the handle tax had been in place, the state would have received about $7.2 million. That’s based on the handle of $392.7 million minus the .25% federal excise tax imposed on all wagers.
Other Changes in the Bill
The bill also makes a few other changes to the Tennessee sports betting market. That includes eliminating the 10% minimum hold requirement state regulators put in place when they established the initial rules for sports betting leading up to the launch in November 2020.
Sports betting operators also could see a change in the annual renewal fee they pay to operate in the state. Currently, all operators pay $750,000 annually for their licenses. Under SB 475, an operator’s renewal fee would be based on their handle for the year.
Operators that accept more than $100 million in bets still would pay the $750,000 fee. However, those not hitting that threshold would pay only $375,000 to renew.
Tennessee has 12 approved licensees operating in the state. The newest operator is Fanatics Tennessee Sportsbook, which is gradually rolling out its product, and the Volunteer State is one of its first markets.
Other licensees are Bally Bet, Barstool Sportsbook, Betly, BetMGM Tennessee, Caesars Sportsbook, DraftKings, FanDuel, Hard Rock Sportsbook, SuperBook, Tennessee Action 247 and WynnBET.
BetTennessee.com will report on this bill and other sports wagering news in the state, as well as offer Tennessee sports betting promotions.