Tennessee Legislators Approve Levy on Sportsbook Wagering Amounts

Tennessee is on the move to revamp its taxation on sportsbooks. On Friday, the state House of Representatives voted 75-7 to pass a revised version of Senate Bill 475, which calls for the state to move from a 20% tax on revenues to a 1.85% tax on handle – the amount wagered each month. This shift would make Tennessee the first state in the nation to tax handle instead of revenue. The bill also includes modifications to the Tennessee Sports Wagering Advisory Committee’s name and a tiered structure on the flat $750,000 annual renewal fee for operators. It is anticipated that the Senate will concur with the House’s amendments and that Governor Bill Lee will sign the bill into law.

Tennessee is the only state that permits online sports betting without requiring an in-person physical location. There are currently a dozen operators accredited in the state, including Bally Bet, Barstool Sportsbook, Betly, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Hard Rock, SuperBook, Tennessee Action 24/7, and WynnBET.

In March, the SWAC (Tennessee Sports Wagering Advisory Committee) reported that bettors had wagered $392.7 million through sports betting apps, which is approximately $65.3 million more than in February. This growth is likely due to the NCAA Men’s Basketball Tournament. The licensed sportsbooks reported $43.7 million in revenues for the month, resulting in the state receiving a $8.8 million tax. This is an increase of $11.9 million from February. Additionally, the March betting activity was up 6% ($22.4 million) from March 2022 and the year-to-year revenue totals were 92.2% higher this year than last year. The state has not provided handle or revenue numbers for individual operators.

This article will be updated as more information becomes available.