Tennessee Changing Sports Betting Tax Structure With 1.85% Gross Wager Tax
Image Credit: capitol.tn.gov
The Center Square [By Jon Styf] –
Tennessee’s Legislature approved a deal Friday to have its sportsbooks taxed 1.85% on all gross wagers, changing the way sports betting has been taxed since the state started legal online wagering in November 2020.
Currently, the state taxes sportsbooks 20% on adjusted gross income but the state had a 10% requirement on how much sportsbooks made on bets ensured the state a higher level of tax collections.
Last year, nine of the 11 active Tennessee sportsbooks last year failed to hit a 10% hold requirement.
The Senate has previously passed a bill with a 2% gross wager tax but changed its stance and concurred with the House bill’s amendments on Friday afternoon. The bill will next head to the desk of Gov. Bill Lee.
In 2022, the sportsbooks paid $68.0 million in privilege tax. Under the new plan, that would have been $69.7 million.
The bill also creates a tiered system of licensing fees, with a nonrefundable $50,000 application fee and $750,000 first-year licensing fee that only remains at that level moving forward for sportsbooks that bring in $100 million or more in gross wagers annually. Below that number, fees are $375,000.
The bill also removes the restriction sportsbooks can only use official league data in determining bet results. Tennessee was the only state with that requirement.
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
