Arguably the most surprising and impressive state-level effort on sports betting in 2019 belongs to Tennessee, home to no casinos of any kind. The over/under on Tennessee enacting a sports betting law post-PASPA could reasonably have been 3.5 years, or more. It took the state just one.
The sponsor of the legislation, state Rep. Rick Staples, a Democrat from Knoxville, pushed the measure through the legislature this spring, after substantial debate on how to bring the new form of gambling to the Volunteer State under the regulation of the state lottery.
Staples told TN Bets on Thursday that the Tennessee Education Lottery is working on hiring new people for implementing the new law, crafting rules and regulations and eventually launching online/mobile sportsbooks. Staples said sports betting will begin by January, in time for the Super Bowl.
“We would hope it [the sports betting launch] could happen in October, but I don’t foresee that,” Staples said to TN Bets in a phone interview. “It will be November at the earliest. I have a pin stuck in January, in time for the NBA playoffs and March Madness in the spring. I really do believe that by the time the Steelers play in the Super Bowl in February, people will be able to place wagers in Tennessee.”
That may sound like a quick timeline for a state that doesn’t have experience in casino gambling, but Staples said the Lottery is more than prepared to quickly make the new law a reality for Tennesseans. Throughout the committee stage of the legislative process, it was pointed out that online sports betting is already taking place within state borders — it’s just unregulated and untaxed.
“The director of the Lottery is an international star in what she does,” Staples said in praise of the state agency. “They have a tremendous staff and legal team. They’ll get it done. As soon as they line up the advisory council [for sports betting] they’ll be in great shape.”
The Lottery meets on Aug. 14 for its Board of Directors meeting. As of Friday, an agenda wasn’t public.
‘Everyone thought I was an idiot’
Even Staples was pleasantly surprised his sports betting bill was able to pass the state Senate and House, and then make it through the desk of Gov. Bill Lee (who is no fan of the gambling industry). When Staples introduced the proposal in November of last year, some folks in Tennessee thought the plan was crazy.
“Everyone thought I was an idiot for trying it,” Staples said. “To go from ‘what were you thinking?’ to having it pass is amazing. It’s good to be the first in something that will generate, and maintain, dollars in our state.”
The legislative process wasn’t without its share of drama. During a hearing in March, there was discussion of an amendment to the bill that would have prohibited betting on major holidays and on Sundays from 3 p.m. to 10 p.m. Online/mobile sportsbooks would have had to shut down during those restricted periods. Staples was happy to have the amendment defeated, though he said there were numerous points in the process that could have derailed the bill, with the Sunday betting ban just being one of many.
“I think you have to listen to your colleagues,” Staples said of the proposed amendment for banning betting on holidays and during peak Sunday sports hours. “I tried to be available for questions, knowing that this was new. There were a lot of whisper campaigns [against the bill]. I made sure to do a lot of face-to-face with people. You had to look at the sensibility of it. We didn’t want to regulate the freedom of choice. It’s not for us to tell what people to do with their money. That was my argument against that amendment. There were a lot of things that could have stopped the bill. We worked through it with bipartisanship.”
At the end of the day, though, Staples knew that the sports betting bill is much like other legislative initiatives. You put in the hard work, but anything can happen.
“I think with any legislation, as you’re trying to argue the intent and maintain the character, you think anything could come off the rails,” he said.
History made for Tennessee
Tennessee was the first state (and only so far) to enact a law for sports betting without brick-and-mortar sportsbooks. That doesn’t mean brick-and-mortar businesses throughout the state won’t see a benefit from regulated sports wagering, but betting will be confined to the internet. It was a wise move for the state, considering that more than 80% of the betting handle in New Jersey, one of the first adopters post-PASPA, is coming over the internet. That percentage is still growing incrementally.
“We wanted to make sure we did online/mobile because that’s where the trend of the future is,” Staples said. “Everyone is using their mobile devices. We were trying to keep with the trend.”
It didn’t hurt that Republican Gov. Lee was willing to accept online/mobile platforms, while being in opposition to brick-and-mortar sportsbooks. Lee reluctantly let the bill become law without his signature, vowing to veto any future gambling expansion bill that hits his desk.
While Staples’ bill was historic and a win for Tennesseans, it wasn’t without some criticism. The bill gives the sports leagues a mandate for use of their data for the purposes of in-game, or live, wagering. The requirement is that it must be under “commercially reasonable” pricing. The provisions were the first of their kind for a new sports betting law, though many states have featured debate on where the sports betting data comes from. The Tennessee bill appears to be becoming a model for some other states, most notably Illinois, which passed a bill with its own data mandate after Tennessee did. The state of Michigan is also looking at a data mandate in its sports betting legislation.
“A lot of people are trying to model our bill,” Staples said. “For me personally, that’s amazing. I didn’t realize it would have the ripple effect for people outside of our state.”
