When Tennessee launched its sports betting market on Nov. 1, 2020, it was the only online-only market in the country.
Some expected neighboring states Georgia and North Carolina to join Tennessee in legalizing online sports betting. Other Tennessee neighbors, Virginia (January 2021) and Arkansas (March 2022), have since launched online sports betting.
North Carolina has a good chance of passing online sports betting during the current legislative session, but the same cannot be said for Georgia online sports betting.
Georgia and Tennessee run down parallel tracks
Georgia and Tennessee have similar profiles. Strong southern religious beliefs run deep in both states, and outside of the state lottery, there was no legal gambling in either state – no casinos, either retail or online, and certainly no sports betting. Both state governments have Republican majorities and a Republican governor.
However, Tennessee overcame some of the same obstacles that exist in Georgia, namely religious opposition, a belief that sports betting wouldn’t bring much tax revenue to the state and instead lead to increased gambling addiction.
After more than two years of Tennessee capturing tax revenue from online sports betting, Georgia isn’t close to legalizing it. Online sports betting legislation failed again in the Senate this month and couldn’t even get read on the House floor.
Rivalry may have pushed Tennessee to legalize first
So how was Tennessee able to legalize and raise more than $120 million in state taxes from online sports betting through January?
Cody Havard, professor of sport commerce and director of research at the University of Memphis’ Kemmons Wilson School, spoke to PlayGeorgia about the importance of interstate rivalry in propelling Tennessee to pass sports betting legislation.
“I believe it was worth Tennessee finding a way to legalize gambling in its current form because it is surrounded by other states with legalized retail sportsbooks and casinos,” Havard said. “If we view a state in a similar way we would view an organization looking for consumers and repeat consumption, it is important that they monitor what others in close proximity are doing.
“As an expert in rivalry, one facet of building a rivalry is proximity and competition for resources. In the case of Tennessee, they were losing out on potential funds and tax revenue to other states in which a person could legally bet or to ‘offshore’ entities.”
What did Tennessee emphasize in lobbying for sports betting?
Tennessee lawmakers raised several key points when legalizing sports betting in 2019 and launching it the following year.
- State tax revenue: Tax revenue from sports betting in Tennessee was projected to bring in an estimated $50 million yearly. It was earmarked for education, local governments and treatment for gambling addiction.
- An illegal sports gambling market existed: Supporters noted that Tennessee residents were spending about $3 billion per year gambling illegally. Not only was the state deprived of tax revenue, but consumers of the illegal betting market also had no protection, supporters argued.
- Bipartisan support: Steve Dickerson, a Republican senator from Nashville, and Rick Staples, a Democratic representative from Knoxville, introduced the legislation. It received support from both parties in each chamber. Even though Republican Gov. Bill Lee was against gambling, he let the bill become law without his signature.
- A bill focused on online: Maybe because the governor wasn’t a fan of gambling, especially casino gambling, Tennessee was focused on an all-online market. And there doesn’t seem to be a strong movement since to add retail sportsbooks or any form of casinos.
What went wrong in Georgia?
The main debate from both Georgia legislative chambers centered on whether a constitutional amendment was necessary to legalize sports betting and horse race betting. An early sports betting bill had horse race betting attached, but did not have much support.
Opponents to sports betting, much like they did in Tennessee three years earlier, didn’t think the amount of taxes raised from legalizing sports betting was worth it.
Socially-conservative lawmakers and lobbyists also made their presence felt, both in committee and on the Senate floor. Arguments appealing to Georgia lawmakers’ responsibility to wisdom targeted sports betting as an imprudent and degrading form of entertainment.
A lack of focus among sports betting bills also caused some lawmakers to write off certain legislation. Casino gaming and horse racing, both non-starters for Georgia legislators, were written into some legislation or added via an amendment to others. This lack of focus probably made it difficult to bring enough legislators together to pass a legislative statute or constitutional amendment.
After sports betting legislation was voted down in the Senate, a House bill was never taken up on Crossover Day, effectively ending it for this session.
Georgia had a lottery first
What’s puzzling when you look at Georgia and Tennessee is that the Georgia Lottery launched more than 10 years before Tennessee.
Georgia launched its lottery on June 29, 1993, with Gov. Zell Miller buying the first ticket. It will turn 30 in June. The lottery has raised more than $25 billion for education in the state. The Tennessee Education Lottery Corp. launched on Jan. 20, 2004, with ticket sales for four instant games available.
From online sports betting, Tennessee brings in more than $400 million a month in bets placed, more than $40 million in revenue and more than $9 million in state taxes during heavy traffic months (the NFL season). Georgia has to notice the numbers in Tennessee and Virginia, along with North Carolina and Kentucky introducing legislation to legalize sports betting.
“It would be important for surrounding states to monitor and track what is happening in close or competing states,” Havard said. “In this case, I would think that discussions and tracking within several states are occurring to determine if legalizing gambling, in whatever form, is appropriate for the state financially and socially.
“To that end, I believe it has become more socially acceptable to bet in the United States, and so I would anticipate many states reviewing its potential benefits.”