by Jonathan Mattise
NASHVILLE — Tennessee Gov. Bill Lee plans to let legislation to allow sports betting become law without his signature, putting a state that has largely shied from expanding gambling in position to become the first to offer an online-only sportsbook.
The bill is headed to the Republican governor after close votes in the GOP-supermajority Senate and House on Tuesday. And though Lee has been no fan of adding more gambling, he has hinted that his administration worked to tailor the bill to make it more palatable to him.
The legislation has a July 1 effective date.
“The governor has said he 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,” Lee spokeswoman Laine Arnold said in a statement Tuesday. “He plans to let this become law without signature.”
Lee also had to consider the drawbacks of a veto in Tennessee, where lawmakers would need only the same majority votes required to pass a bill to override a veto.
Tennessee is now lined up with Montana, Iowa and Indiana as states nearing sports betting decisions. They would join six others that switched last year after a U.S. Supreme Court decision allowing it nationwide. In addition to those states, two tribal casinos in Nevada and New Mexico are offering sports betting without explicit state approval.
On Tuesday, the Senate narrowly voted 19-12 for the bill that would allow regulated statewide mobile and interactive sports gambling for people 21 years old and up. Fourteen Republicans joined the chamber’s five Democrats in the bill’s passage, with Republicans casting all 12 “no” votes, including Speaker Randy McNally.
The House had passed its own version of the bill in a 58-37 vote last week that similarly split Republicans. The House lost even more votes in a 51-40 tally Tuesday to agree with the Senate’s proposal. Fifty votes are needed for House passage.
Proponents of the bill who said they want sports betting to happen under regulation were narrowly able to fend off opposition by some Republicans, who contend it would fuel addiction.
Republican Sen. Janice Bowling, who voted “no,” likened the approach to “putting the ambulance at the bottom of the hill, rather than putting the fence at the top of the hill.”
“We just seem to be looking in a way that we’re going to try to create a gray market, and I think probably if we could get rid of the black market it would be better,” said Bowling, of Tullahoma.
DraftKings, one of the likely Tennessee online sportsbooks, tweeted its thanks to Republican bill sponsor Sen. Steve Dickerson of Nashville on Tuesday morning. The industry had a big presence in Nashville this year — DraftKings has seven registered Tennessee lobbyists, while sports betting firm FanDuel has nine, state records show. Both have had sizeable Tennessee lobbying teams since 2015.
DraftKings also rallied public support for the bill, saying on its “Let Tennessee bet” website that without the legislation money would continue to “flow to illegal offshore bookies instead of staying in Tennessee as a revenue source.”
“It’s happening anyway,” Dickerson said of sports gambling in Tennessee. “What this bill does is, however, is brings it up in the light and has provisions in it for troubled gamblers.”
The proposal is projected to bring in more than $50 million annually — $40.7 million for the lottery fund that goes toward education, including college scholarships; $7.6 million for local governments’ local infrastructure projects; and $2.5 million for mental health offerings, including addiction services, a fiscal note estimates.
However, four of the six states with newly legal state-allowed sports betting are still bringing in significantly less than their own revenue expectations, according to an AP analysis of state fiscal reports .
The bill would bank on technology to ensure people can’t place bets if they are underage or located outside the state’s borders. It also would ban a variety of people from betting who would have conflicts or access to confidential information about athletes, and would not allow bets on so-called proposition bets in college sports, including on an individual collegiate athlete’s performance.