Sportsbooks working in Tennessee will quickly start paying taxes primarily based on wagers quite than revenues. The brand new regulation goes into impact on July 1.
Gov. Invoice Lee delivers the state tackle on February 6, above. Lee not too long ago signed Senate Invoice 475, which is able to tax sports activities betting deal with and change a earlier tax construction. (Picture: State of Tennessee)
Tennessee Gov. Invoice Lee (R) not too long ago signed into regulation Senate Invoice 475, which implements a first-of-its-kind state tax on sports activities betting deal with, changing a earlier construction by which taxes had been collected on revenues.
When the brand new regulation goes dwell, operators shall be topic to a 1.85% tax on deal with, the quantity wagered every month, changing a 20% tax on gross income. Nevertheless, operators also can deduct a federal excise tax of .25% per wager earlier than calculating the brand new state tax.
The brand new regulation additionally replaces a flat $750K renewal payment for operators with a tiered system, starting from $375K to $750K, primarily based on operator revenues. It can additionally remove the required 10% maintain for sportsbooks.
The regulation makes a number of different modifications, together with renaming the regulatory company from the Sports activities Wagering Advisory Council to the Sports activities Wagering Council.
State regulators decided that 9 of 11 sportsbook operators in Tennessee didn’t meet the ten% maintain requirement in 2022 and requested modifications to the regulation. The brand new regulation confronted little resistance earlier this yearas it moved by means of the legislature. It cleared the state Home on a 75-7 vote in April, and was unanimously adopted by the state Senate shortly after that.
Huge Names on the Desk
The business seems to be taking a muted strategy to the brand new regulation, and it stays to be seen whether or not Tennessee’s strategy will function a mannequin for different states. Sportsbooks haven’t publicly weighed in on the invoice since its passage. Tennessee permits solely on-line betting and has no brick-and-mortar operations.
There are 12 operators licensed to take bets within the state: Bally Guess, Barstool Sportsbook, Betly, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Onerous Rock, SuperBook, Tennessee Motion 24/7, and WynnBET.
The Sports activities Betting Alliance, a commerce affiliation whose members embrace most main sports activities books, spent between $50K and $110K on lobbyists and lobbying bills in Tennessee this 12 months, according to state records. Tennessee Motion 24/7 spent between $25K and $50K, and Penn Nationwide Gaming, which owns Barstool Sportsbook, spent less than $10K, in accordance with its personal disclosure filings. The bills cowl all points, not simply the sports activities betting laws. Not one of the organizations that disclosed lobbying expenditures responded to On line casino.org’s requests for remark Wednesday.
No different sportsbook operators disclosed any lobbying bills associated to amusement, video games, or sports activities laws within the state this 12 months, in accordance with a search of the disclosure filings maintained by the Tennessee Ethics Fee.
Publish-Insanity Drop
In April, the latest month for which knowledge is obtainable, Tennessee bettors wagered $318 million at sportsbooks within the state, in accordance with the Sports activities Wagering Advisory Council (SWAC). Sportsbooks’ adjusted gross revenue for the month was $32 million, and the state collected $6 million in taxes underneath the outdated system.
Wagering was down from almost $393 million in March, when the NCAA Males’s Basketball Event doubtless boosted receipts.
The state doesn’t report monetary knowledge from particular person operators.
