Tennessee Off to a Solid Start Towards Legal Sports Betting
Tennessee Off to a Solid Start Towards Legal Sports Betting
Legislative update: three new states – Illinois, Iowa and Texas – have introduced sports betting legislation, bringing the total number of states with active #sportsbetting bills to 18. https://t.co/PkSveUHklN pic.twitter.com/9V2Fp9JKdP
— American Gaming Assn (@AmerGamingAssn) February 1, 2019
Daniel Kustelski, CEO of Chalkline Sports, has operated a sports book in South Africa and an ADW (horse racing book) based in Kentucky. This week, he spoke at ICE London, the world’s largest annual gaming conference. Daniel says:
“We’re encouraged by the sports betting bill being presented in the Tennessee legislature. This is part of a progressive trend of 28 states that have regulated or are considering sports betting regulation. The best step forward now is for the Tennessee legislature to approve this bill with strong player protections, a low tax rate (to combat offshore options) and a mobile option.”
The “Tennessee Sports Gaming Act” would allow local governments to decide whether or not to allow sports betting. According to the bill’s sponsor, state representative Rick Staples, the bill’s intention is to allow local governments to have a new form of income.
“Billions of dollars leave the state of Tennessee to our neighboring states with casino and table gambling. Billions. So, this is a new stream of revenue that the federal government is allowing the states to take advantage of,” said Rep. Staples.
Tennessee Stands to Reap Rewards from Sports Betting
According to Eilers & Krejcik, as well as Oxford Economics, it has been determined that the main variables in play are low (6.5%) to high (15%) and the market penetration of the betting products.
Currently, there are 5.1M individuals over the age of 21, the legal age to gamble in the U.S. According to the Oxford Economics predictions, at a 10% tax rate, TN can expect:
- $41M per year in Gaming tax
- $300M in Net Gaming Revenue to operators per year on $4.5Bn wagered
Our Take on the Proposed Bill
- Tennessee’s reasonable tax rate helps ensure that prices will be competitive with offshore/illegal bookies. This will ultimately help sports betting operators capture some of the black market.
- Mobile betting is already over 50% of New Jersey betting. Tennessee’s current bill appears to allow for mobile betting, presenting a massive opportunity for growth.
- TN Gambling Commission will be critical. The role and responsibilities of Gambling Commissions are relatively well established in other jurisdictions. We’re looking forward to more details here.
- Opportunities for established sports betting operators AND local entertainment brands. Without any current gambling operations in the state, there seems to be massive opportunities for these groups to secure licenses.
For updates, reach out to hello@chalklinesports.com or sign up for our newsletter.
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