by Jon Styf
A Tennessee sports wagering bill would change the way the state computes taxes on sports betting from taxing the amount sportsbooks make in revenue to taxing all wagers placed in the state.
Currently, the state places a 20% tax on each sportsbook’s adjusted gross income. With that, the state has a rule each sportsbook must make 10% profit on total bets placed. Last year, however, nine of the state’s 10 active sportsbooks did not reach that mark.
Instead of fining those operators, House Bill 1362 would instead begin to tax all wagers placed with the sportsbooks at 1.85%. In 2022, Tennessee collected $68 million in privilege tax. With the new rule in place, that would have been $71 million.
The bill is scheduled to be heard by Tennessee’s House Finance, Ways and Means Committee on Wednesday and the companion Senate bill will next be heard by the Senate Finance, Ways and Means committee but it is not yet on the schedule.
Rep. Andrew Farmer, R-Sevierville, is sponsoring the bill and was asked why the rate was lowered from 2% to 1.85%. The last-heard Senate version of the bill has a 2% tax attached.
“We want to be as business-friendly as we can,” Farmer said. “We’re not looking to poach and make money off these folks, so we came down to knock that to 1.85. It still increases revenue, it’s going to make plenty of money.”
The bill would also allow sportsbooks to use information from providers that is not official league data, something several sportsbooks asked Tennessee’s Sports Wagering Advisory Council to consider. Tennessee was the only state with that requirement.
The bill would also change the name of the council to delete “advisory.”
It would add an initial $150,000 registration fee for new vendors – who provide services for sportsbooks – and would create a tiered system to charge sportsbooks an annual fee.
The first year would remain $750,000 while sportsbooks that make receive less than $500 million in annual wagers but more than $100 million would be charged a $500,000 fee and those with less than $100 million bets would be charged $250,000.
Fanatics Sportsbook recently became the state’s 13th licensed sportsbook but has not begun full operations while Wagr has currently taken its app offline.
Bally Bet has held a license in Tennessee, which was recently renewed, for more than a year but has not begun operations.
– – –
Jon Styf is an award-winning editor and reporter of The Center Square who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies.
Photo “Sports Betting” by Dough4872. CC BY-SA 4.0.
What a disgusting mess. A state that attempts to generate revenues on what is often a “tax” on the lowest income earners is flat out disgusting. Nothing like running a government on gambling – lottery and now online sports betting. I cannot believe that Tennessee has stooped so low.