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Tennessee lawmakers could end up undercutting themselves with a recently introduced measure taxing wagering handle.
Sports betting industry analyst Joe Brennan, Jr. pointed out the obvious:
"Tennessee seems to have volunteered (get it?) to be the laboratory for bad policy ideas for regulating sports betting. What’s the appeal of operating there?"
Answer: There is none, or very little at least.
The handle tax will be the first of its kind nationally, assuming it passes and Governor Bill Lee signs SB 475 into law. A 20% tax of adjusted gross revenue is currently applied and that will switch over to a 1.85% tax on an operator’s handle.
It is designed to increase the tax revenue for the state but that's not necessarily the case.
From Sports Handle:
In the first three months of 2023, Tennessee received $22.4 million in tax revenue from mobile sportsbooks. If the 1.85% handle tax were in place, the state would instead have received $20.9 million.
So far in fiscal year 2023, which began last July 1, Tennessee has received $65 million in tax revenue from sports betting. That number would have been $58.1 million when using the 1.85% handle tax, nearly $7 million less.
The bill does remove the controversial 10% cap on winnings and the the state’s official league data mandate.
- Gilbert Horowitz, Gambling911.com
