Tennessee became the fourth state in 2019 to legalize sports betting. However, Tennessee’s situation stands out more than those other three states to legalize this year. Tennessee’s sports betting bill allows for mobile-only sports betting, the only state so far to do so.
Governor Bill Lee allowed the bill to become law on May 24 without his signature. Lee has been vocal about his opposition to gambling and said that he wouldn’t sign a gambling bill. However, he did say that he would allow it to become law without his signature, which is what happened.
How Sports Betting Came to Tennessee
After the PASPA ruling in May of 2018, a lot of states immediately hopped on the legal sports betting train, Tennessee was not one of those states. It wasn’t until towards the end of 2018 that Tennessee started to entertain the idea of legal sportsbooks in the state. SB 16 was formally introduced in the Senate in December of 2018.
The following month SB 16 passed the First Consideration and began its trek through the legislative process. Over the next few months, the bill bounced around Senate subcommittees and underwent a number of amendments. On April 30, SB 16 took the place of the House’s counterpart bill, HB 1, and was put to a vote.
Once May rolled around, the House voted 58-37 in favor of the bill. It then passed through the Senate by a vote of 20-12. Despite Governor Lee’s opposition to gambling, he noted that he did not want to state in the way of the state’s decision to allow for legalized sports betting. Lee then allowed the bill to become law without his signature on May 24, 2019.
What Sports Betting Will Look Like in Tennessee
There are no casinos in the state of Tennessee. That is why we are seeing mobile-only sports betting. According to the bill, there will be a 20 percent tax on sports betting revenue. Of that 20 percent, 80 percent will go into the state’s Lottery for Education Account. 15 percent will go into the state’s general fund and the remaining five percent will go towards gambling addiction programs.
Officials believe that a full fiscal year of sports betting could generate nearly $41 million for education, $7.6 million for the general fund and $2.5 million for gambling addiction. Annual licensing fees for sportsbooks will be $750,000. There is no restriction to the number of licenses allowed in the state.
Bettors must be at least 21 years of age and located in the state of Tennessee at the time they place their bets. Geofencing will ensure bettors locations within state lines.
While most states banned college sports betting on events in their state, Tennessee went one step further. An amendment to the bill banned betting on all collegiate sporting events.
Tennessee became the first state to mandate the use of “official league data” for live-betting. They are also the first state to allow the professional sports leagues to restrict the types of available bets in the state.
The bill will officially take effect on July 1, 2019. The Tennessee Lottery will begin to establish rules and regulations on or after that date. A timeline for launch is unknown at this time, but some officials believe the first bet won’t be placed in Tennessee until January 2020.
Governor Bill Lee’s Opposition Towards Gambling
Governor Bill Lee released a statement after allowing the sports betting bill to become law without his signature.
I am returning the Tennessee Sports Gaming Act (HB0001/SB0016) to the General Assembly today without my signature. My full statement is below: pic.twitter.com/iolgR8G6J0
— Gov. Bill Lee (@GovBillLee) May 24, 2019
“I am returning the Tennessee Sports Gaming Act (HB0001/SB0016) to the General Assembly today without my signature. My full statement is below:
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 the issue differently but let me be clear: any future efforts to expand gambling or introduce casinos in Tennessee will assure my veto.”
Lee’s statement has drawn some critism with his thoughts on casinos preying on poverty. Especially considering Tennessee has a state lottery. It has been well documented by a number of sources that state lotteries are mostly frequented by the “poor”.
The Hypocrisy of Lee’s Statement
A 2010 paper in the Journal of Community Psychology found that lottery outlets are more prominent in neighborhoods with large numbers of minorities, who are at greatest risk for developing gambling addictions.
A 2011 paper in the Journal of Gambling Studies concluded that the “poor are still the leading patron of the lottery and even the people who were made to feel poor buy lotteries. The legalization of gambling has seen a significant increase of young people gambling, particularly in lotteries, and the best predictor of their lottery gambling is their parents’ lottery participation.”
A 2012 study from researchers at the University of Buffalo, also published in the Journal of Gambling Studies. Titled “Gambling on the Lottery: Sociodemographic Correlates Across the Lifespan,” analyzed telephone survey data from a random sampling of nearly 5,000 Americans. That study found that:
Those in the lowest fifth in terms of socioeconomic status (SES) had the “highest rate of lottery gambling (61%) and the highest mean level of days gambled in the past year (26.1 days).” The study concluded that “increased levels of lottery play are linked with certain subgroups in the U.S. population — males, blacks, Native Americans, and those who live in disadvantaged neighborhoods.”
The Atlantic put out an article on the lottery back in 2015. The article stated that in 2014, Americans spent $70.1 billion on the lottery. That is more than $230 for every person living in the United States, man, woman, and child.
Tennessee’s 2014 lotto sales per household were the 18th highest in the country at $599 per household.
Tennessee’s lottery features instant games ranging from $1-$30 per ticket. The odds on these tickets paying ranges from 1 in 2.75 to 1 in 4.97. That means that even the best odds are 36.36 percent and they can be low as 20.12 percent. For comparison, casino games, which Lee is oppossed to, have a lot better odds. Baccarat for example is considered the most “fair” game in a casino in terms of odds. The house edge is only 1%, which gives players a 49.50 percent chance of winning on any given hand, a lot better than those lottery tickets. Not to mention sports betting, which is considered a 50/50 shot with each bet. Again, a lot better then those lottery tickets that Governor Lee is in favor of, but apparently not casino games which give players better odds in a more fun atmosphere.
Chasing the lottery is statistically far less advantageous than casino games and sports betting. Is there Hypocrisy? Is there Irony? You be the judge.