Tennessee Sportsbetting Tax Changes Coming

A bill that will change the way sportsbetting taxes are paid in the state of Tennessee was signed into law by Governor Bill Lee this week and will come into full effect July 1st, 2023.

The law will see online sportsbooks taxed on their handle at 1.85%, rather than the 20% of the net operator revenues that are currently in place. Tennessee's tax revenues from online betting are split among multiple causes, with 80% going to education, 15% to local governments, and 5% to mental health groups.

A change to the license application process is also included in the law, with a tiered system ranging between $375,000 and $750,000 depending on revenues. The current scheme is a flat $750,000 fee. The move was made as there was previously a 10% hold for sportsbooks, but that nine of the eleven licensed books didn't make enough revenue to meet the hold requirement.

The changes are slated to go into effect at 12:00am on July 1st.