After a slow start to the year on the sports betting front, Tennessee last week became the fourth state to legalize sports wagering this year.
House Bill 1 was originally filed for introduction in November, but then officially introduced on January 8th of this year in the House. It then passed votes of the House and Senate in late April. In mid-May, the bill was signed by both the House and Senate Speakers and on May 14th, it was sent to Governor Bill Lee’s desk for signature.
The Governor did not sign House Bill 1 into law, though. In Tennessee, the Governor is given ten days, not counting Sundays, to sign or veto a bill. If he does nothing, the bill automatically becomes a law. This is what happened with the sports betting bill. Governor Lee did not approve of the bill, but because his veto can be overridden by “a majority vote of the membership to which each body is entitled under the Constitution,” he likely saw no point in a veto.
He tweeted his decision on Friday:
I am letting House Bill 0001 become law without my signature.
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 on 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.
As you might be able to tell from the above, Tennessee’s law is interesting in that it only allows for online sports betting, whereas all of the other states that have legalized the pastime have include both online and land-based sports betting. Tennessee does not have casinos, so to allow for brick-and-mortar sports betting, either casinos would have had to have been permitted or specific sports betting shops would have had to be authorized.
That part is interesting. This next part is shitty. According to the law, sports betting operators are required to buy official league statistical data for all “in-play” wagers and the leagues must offer “commercially reasonable terms” for said data. Now, it is all well and good for operators to make a deal with leagues to purchase data, but the problem here is that it is now required under the law. Operators have no choice as to where they get their in-play data and though the leagues have been told to play fair, who says that they will?
The financial figures of the law are also really rough on operators. A license will cost $750,000 per year and sports betting revenue will be taxed a steep 20 percent. Remember, this will all be online, so there are no other revenue streams for sports betting operators.
It will still be a while before Tennesseans will be able to place their bets, as the law does not go into effect until July 1st and then the state Lottery still has to draw up the regulations.