Sports Betting Tax High in Tennessee
The Tennessee sports betting industry has put up some big numbers in terms of total handle, but the state has done even better in terms of tax revenue.
In just five months, Tennessee has brought in $16 million in privilege tax, and this is right on track with other major markets.
New Jersey, Pennsylvania, and Illinois were the only three states with more tax revenue during that time period, and those three states dominate the US industry. Tennessee is just slightly ahead of Nevada since November 2020, but the Volunteer State is not even close to bringing in as much handle.
Tennessee has a 20% tax rate in place for sports betting revenue, and that is right in the middle of the national average. This has helped the state bring in more tax revenue than other states that have had sports betting for more than a year.
Rhode Island has the highest sports betting tax rate at 51%, but that state has recorded just $9.2 million in revenue since November 2020. Nevada has the lowest sports betting tax rate at 6.75%, and that has allowed Tennessee to eclipse that state.
It took Tennessee just six months to reach $1 billion in total betting handle, becoming the first state to accomplish the feat. New Jersey was able to do this in seven months, and now that state is nearly reaching the $1 billion mark each month.
Pennsylvania, the state that has brought in the most sports betting revenue since November, has a tax rate of 34%. Other states that are looking to launch sports betting will likely look to Tennessee when setting a tax rate.
How Does This Money Benefit the State?
The Tennessee Lottery for Education receives 80% of all sports betting tax revenue, and that has amounted to more than $14.8 million since November. A majority of this money goes to secondary education at this time, but there has been a recent push to change that.
Lawmakers attempted to pass a bill earlier this year that would send the money to K-12 programs instead of secondary education. More specifically, facilities at K-12 institutions need some improvements, and the revenue would help fund these projects.
The Tennessee General Assembly failed to pass this bill in 2021, and this will have to be brought back to the table in 2022. This was just one of several changes that lawmakers were hoping to make on a sports betting industry that is just six months old.
15% of the sports betting tax revenue goes to the state to help with infrastructure and road projects. There has been nearly $3 million sent to this initiative, but even more, money is on the way.
The remaining 5% is allocated for the state to set up problem gambling initiatives. A recent study found that calls for gambling addiction have tripled since November when sports betting launched.
There has been $1 million invested in these programs since November, but more money is needed as this continues to be a problem.
Check back for more TN sports betting updates and the latest sports news in The Volunteer State.
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