Tennessee sports betting narrowly escaped the House Finance Ways and Means Committee on Wednesday after a tense discussion of H 1.
The shape-shifting bill now featuring hefty license fees and revenue taxes passed on a 10-9 vote, hours after clearing a related subcommittee. It will head to the House floor Monday and if passed, could be taken up in the Senate as early as Tuesday.
Discussion of the TN sports betting bill took an uncomfortable turn in committee when Rep. Andy Holt questioned HB 1 sponsor Rep. Rick Staples. During 15 minutes of questioning, Holt, who is white, equated addiction to sports betting to “slavery” in addressing Staples, who is black:
“Well I personally believe — and I think there are others on this committee who believe — that this legislation has been rushed through. I believe that the potential ramifications of this legislation are life altering. I believe that this leads down a path toward, in essence, slavery — slavery to an addiction. The state is playing into that addiction, unfortunately.”
Holt chairs the Finance Ways and Means subcommittee that HB 1 passed through earlier Wednesday.
The Republican from Dresden, Tenn. previously attracted media attention for refusing to cancel an AR-15 giveaway after the Orlando mass shooting in 2016 and wanting to fine Memphis “millions of dollars” for removing Confederate monuments last year.
Staples, a Democrat from Knoxville, recently resigned a House caucus leadership position after violating the chamber’s sexual harassment policy.
TN sports betting discussion tense at times
Staples responded to the question with a defense of the process for his Tennessee sports betting bill:
“Let me say to the chair’s comments, whom I respect and appreciate … We spent — including the subcommittee of the Policy Committee — we spent seven weeks vetting this legislation, dealing with the AG, stakeholders, other interested parties, several individuals.
“We addressed committee members’ issues. We had a lot of meetings and dialogues. We were truly, truly vetted in the Policy Committee, and we present a document coming out of that Policy Committee that has a strong, positive fiscal note.
“We’ve worked really hard for right at a year to make sure we would have a good document to present before this legislative body.”
Additional questions answered in TN sports betting
Staples also fielded other concerns in the legal sports betting discussion:
Verifying and protecting consumers
To Hall’s concerns about this, Staples responded:
“Unfortunately, Mr. Chairman, there are nefarious and criminal individuals that seek to take advantage of something that is meant to be positive and controlled. There will always be a criminal element.
“Currently without this piece of legislation, online gaming is taking place in this state, and those dollars are going to offshore accounts …”
Rep. Cameron Sexton also answered this concern:
“If you’re worried about the children, you have bookies all across the state of Tennessee who have no regulations. There is no oversight …
“So with this scenario, at least from this perspective, there is more oversight, more regulation to ensure that children can not do this online compared to what they currently can do right now without any oversight or any regulation.”
Added addiction concerns
Rep. Jason Zachary likened sports betting to drug problems in opposing the bill:
“We do not have a revenue problem. But what we do have is a drug crisis and an opioid problem. And the last thing we need to do is add gambling to that problem.”
A House amendment from a previous committee directed a percentage of revenue to problem gambling assistance:
5 percent shall be distributed by the Corporation for use by the Department of Mental Health and Substance Abuse Services to develop programs for gambling addiction and compulsive gambling
What’s now in Tennessee sports betting bill
The Tennessee sports betting bill looks quite a bit different than it did when introduced. That’s nothing unusual of course, as legislation often receives tweaks as it winds through committees.
The nature of the changes, though, merits mention because many are significant:
- Annual license fee increased from $7,500 to $750,000
- Tax rate increased from 10 to 20 percent, with another amendment to move it 22.5 percent of sports betting revenue
- Brick-and-mortar sports betting eliminated; bill is online-only now
- Cap of 10 licenses removed; no limit imposed
- Official data requirement for in-play betting added
Lawmakers anticipate TN sports betting will increase state revenue by $20 million in its first year and $40 million in its second year.
Legal Sports Report’s Eric Ramsey contributed to this report.