In Tennessee, the recently passed HB 1 bans physical sportsbooks, only allowing online and mobile wagering. Governor Bill Lee’s spokesperson said Lee “does not believe that the expansion of gambling is best, but he recognizes that many in the legislature found this to be an issue they want to explore further” and would allow it to become law without his signature.
When the legislation becomes law, gambling observers believe Tennessee could become “NashVegas.” Dr. Cody T. Havard, associate professor of Sport Commerce at the University of Memphis’ Kemmons Wilson School of Hospitality & Resort Management, said, “I do think there’s a big market if people around the state are going to be able to do this.”
With the state’s National Basketball Association franchise Memphis Grizzlies, National Football League’s Tennessee Titans and National Hockey League’s Nashville Predators, Tennessee hosts more professional teams than any state with legal sports betting besides Pennsylvania. Also, Tennessee position in the Southeastern Conference market represents a significant opportunity.
Havard said, “Sports in the state is taken very seriously as it is most places. But you also have places like Nashville, places like Memphis that have the professional team and they also have the states surrounding Tennessee that are starting to make a lot of money off of the product in Tennessee. If legal sports betting were to happen in Tennessee, I would think that would be a very big thing for the state and for finances.”
Havard added aside from die-hard fans, “you also have those kind of general fans and then even more so people who may not be as interested in a sport product, but they’re interested in kind of the eustress they can get from gambling. And I think that would attract people to the area as well as, I think it would be very, very big for a state, in both financial terms and kind of cultural or to a sport fan from a sport fan’s perspective.”
Two Tennessee cities rank among the top 25 in U.S. population: Memphis at 656,000 and Nashville at 655,000, plus Knoxville at 187,000 and Chattanooga at179,000. In addition, Tennessee is just 110 miles from Atlanta, with a metro population of 5.8 million.
HB 1 calls for a 20 percent tax rate on sports betting revenue plus a $750,000 annual license fee, both higher than national trends. A study by Eilers and Krejcik claimed sports betting could generated $229 million in annual revenue. An estimated $3 million is wagered annually on sports betting in Tennessee.
Cal Spears, chief executive officer at the Nashville-based daily fantasy sports community RotoGrinders, stated he was “shocked we got there so quickly” regarding sports betting legislation. “We have no casinos and some proponents of this bill voiced strong opposition to land-based casinos while lobbying for HB 1. Mobile-only through the lottery was our only viable path to sports betting. Local bookies are common now, but I think consumers will quickly switch over to regulated books as the diversity of offerings becomes apparent through advertising.”
Daniel Kustelski, chief executive officer at Nashville-based daily fantasy and sports betting platform builder Chalkline Sports, said the Tennessee mobile-only approach “feels progressive.” He added the impact on surrounding states and “the South in general will be intense” and result in more states legalizing sports betting. “The sports and types of bets that Tennesseans will bet on will look a bit different than what happens in Nevada and New Jersey. It will add flavor to the national landscape of betting personas,” he said.
