Despite his personal objections to gambling expansion in The Volunteer State, Governor Bill Lee will allow a recently passed Tennessee sports betting bill to become law.
Senate Bill 16 will authorize the operation of online / mobile sportsbooks across the state, but not land-based bet shops. Lee’s executive powers allow him to veto or endorse the legislation with a signature. A third option is to allow the Tennessee sports betting bill to lapse into law without his signature. In a statement issued by Lee’s press secretary Laine Arnold, the conservative Republican Governor plans to do just that:
“The governor has said he does not believe that the expansion of gambling is best, but he recognizes that many in the legislature found this to be an issue they want to explore further.
He plans to let this become law without his signature.”
During his successful gubernatorial campaign, Lee told voters during a televised debate that he doesn’t believe gambling to be “consistent with the values of this state.” Lee also pointed out that Tennessee’s state constitution required amendment before the lottery was finally allowed in 2002.
SB-16 arrived on Lee’s desk April 30, after the state House of Representatives used the narrowest of margins to approve the country’s first online-only sports betting bill. Tennessee’s Senate has 99 seats, meaning 50 votes are needed for a majority. Members subsequently voted 51-40 to grant SB-16 its final legislative approval.
The House originally voted 58-37 in favor of the bill. After the Senate amended it ahead of its own 19-12 vote, however, the concurrence process saw that majority depleted.
Despite direct pleas from fellow Republicans to veto the Tennessee sports betting bill, Lee opted to let the Legislature do its job. That’s in spite of the efforts of state representative Jerry Sexton (R-35), who prayed to God for an executive override during a House hearing.
Regulated online sports betting will officially become law on July 1 of this year.
The Volunteer State is one of only nine that have no commercial or tribal casinos. Nevertheless, the bill’s early drafts called for brick and mortar sportsbooks to be placed in up to 50 retail locations via self-service kiosks.
Lee’s opposition to this level of gambling expansion nixed those plans, and SB-16 was modified to limit sports wagering to online / mobile platforms only.
The bill’s sponsors – state senator Steve Dickerson (R-20) and state representative Rick Staples, D-15) – both framed the issue in the context of consumer protection during an interview with the Times Free Press.
Dickerson contended that underground bookies were already rampant in Tennessee, so legalization will “bring it off the street corners.”
Staples said regulated online / mobile wagering would “bring the illegal online sports gambling market into the sunshine.”
In explaining the impetus for prefiling his sports betting legislation back in January, Staples also pointed to the potential revenue stream provided by licensing fees and taxation:
“We already have billions of dollars that leave the state, going to other states that have casino gambling, so here’s a chance to do in-state sports betting that would capture dollars.”
Lawmakers have offered forecasts of $50 million in annual revenue – based on licensing fees of $750,000 and a 20 percent privilege tax on gross gaming revenue. However, industry analyst Eric Ramsey of Legal Sports Report isn’t as optimistic.
Speaking to WJHL.com, Ramsey cautioned that initial revenue projections often fall short in a regulated sports betting market’s early going:
“I’d exercise a little caution with that. In other young, early adopter markets in the US, some of those projections, have been a little ambitious for the first year.”