Tennessee sports betting is about to change for sportsbooks in the Volunteer State.
In a Friday morning shakeup, Tennessee's House of Representatives approved a new sports betting tax reform bill - HB 1362 - by a vote of 75-7 that will tax sports wagering operators in the state on total handle rather than adjusted gross revenues.
The 1.85% handle tax will be the first of its kind in the nation if signed by Gov. Bill Lee (R). The new tax would replace the 20% tax of adjusted gross revenue and will increase sports betting tax revenue for the state by more than $1.7 million in fiscal year 23-24, based on a recent fiscal impact summary for the bill.
The state Senate-approved version of the bill - SB 0475, which at first had a 2% tax rate for total handle - was amended as well.
With this revamp, it also repeals the hold rate for operators, eliminating a requirement where any operator in the state must maintain a 10% hold every month or face a $25K penalty.
Other changes in the bill:
- No more annual registration needed by operators; registration will be for 3 years before any renewal
- Increases to the state's Lottery for Education Account, local government and the Department of Mental Health and Substance Abuse Services
if approved and signed by the Gov. Lee, these increases would be seen fiscal year 2023-24.
March Numbers Show Increase in Sports Betting Handle
Tennessee sports betting apps loved March Madness.
Two days ago, the state’s sportsbooks reported more than $392.66 million in sports wagering handle during March, a solid 20% increase from February’s total of $293.38 million.
The state's adjusted gross income from sports betting generated more than $43.73 million, a huge 37.3% increase from February and a tremendous 92.2% year-over-year increase from 2022’s sum of $22.75 million.
March taxes posted at more than $8.75 million, an increase of 37.2% from February and a 92.4% increase year-over-year from 2022’s total of $4.55 million.
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