Image Credit: capitol.tn.gov
The Center Square [ By Jon Styf] –
A bill that will change how Tennessee taxes sports gambling will next head to the Senate.
Senate Bill 475 will tax sportsbooks 2% on all wagers instead of the current 20% on adjusted gross income, which is essentially the amount that sportsbooks make on bets. The House version, which has been placed behind the budget in the Finance, Ways and Means Committee, proposed a 1.85% tax on all wagers.
The change comes after nine of the 11 active Tennessee sportsbooks last year failed to hit a 10% hold requirement. That 10% requirement on how much sportsbooks made on bets ensured the state a higher level of tax collections.
Rather than fine and require true-up payments from the sportsbooks, which failed to meet the 10% requirement the year before as well, Tennessee’s Sports Wagering Advisory Council proposed changing the rules to eliminate the issue but also ensure state taxes on wagers moving forward.
“This new tax structure is simpler to calculate, increases transparency and is not contingent on payouts,” said Sen. John Stevens, R-Huntingdon. “It allows licensees to run their businesses as they see fit without the mandate of needing a 10% hold requirement.”
The bill also allows sportsbooks to use data that isn’t official league data for in-play wagers – a requirement only Tennessee had previously – and removes the word “advisory” from the council’s name.
In 2022, the sportsbooks paid $68 million in privilege tax. Under the new plan, they would have paid $75 million. Under the House plan, that would have been $70 million.
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.
