Amends TCA Title 4; Title 39; Title 47; Title 49 and Title 67.

This bill:<br /> <br /> (1) Authorizes sports betting in Memphis, Knoxville, Chattanooga, and Nashville if the city approves sports betting by an election on the question;<br /> (2) Establishes the Tennessee sports wagering commission to regulate sports betting;<br /> (3) Imposes a tax on sports wagering; and<br /> (4) Establishes requirements applicable to sports wagering.<br /> <br /> COMMISSION<br /> <br /> This bill creates the Tennessee sports wagering commission consisting of nine members. The governor, speaker of the house, and speaker of the senate will each appoint three members, and of those three, one must be from each grand division.<br /> <br /> This bill sets out in detail other qualifications and criteria for commission members and the conducting of business by the commission.<br /> <br /> This bill administratively attaches the commission to the department of tourism.<br /> <br /> This bill requires the commission to produce and submit a yearly report to the chair of the state and local government committee of the senate and chair of the state government committee of the house of representatives. The report must include details on investigations conducted by the committee.<br /> <br /> COMMISSION DUTIES<br /> <br /> This bill requires the commission to, among other things:<br /> <br /> (1) Exercise authority over all operators and sports books in this state;<br /> (2) Issue and renew sports book permits to qualified entities;<br /> (3) Provide information to the department of revenue to assist in its administration and collection of the privilege tax applicable to the gross sports wagering revenue of an operator;<br /> (4) Establish and administer a gambling addiction treatment program;<br /> (5) Establish and administer a dispute resolution service for complaints against operators; and<br /> (6) Promulgate rules to regulate the sports betting industry.<br /> <br /> This bill authorizes the commission to establish fees relative to sports book permits. This bill requires the commission to use fees to fund the commission's operations, the gambling addiction treatment program, and the dispute resolution service for complaints against operators. <br /> <br /> TAX ON GROSS SPORTS WAGERING REVENUE<br /> <br /> This bill imposes a 10 percent privilege tax on an operator's gross sports wagering revenue. In addition to the privilege tax, a municipality may levy a privilege tax of up to 2 percent on the gross sports wagering revenue generated from wagers placed at a physical sports book located within the municipality's corporate boundaries.<br /> <br /> Tax revenue collected pursuant to this bill will be earmarked and allocated specifically for pre-K-12 grade education and deposited in the education trust fund.<br /> <br /> OPERATORS AUTHORIZED TO ACCEPT WAGERS<br /> <br /> This bill authorizes operators to operate a sport book and accept wagers from authorized sports bettors. An operator's physical sports book location must be within:<br /> <br /> (1) The area designated for sports book locations by a city that has approved sports wagering; or<br /> (2) Generally, the stadium or arena complex where a professional sports team primarily plays home games, if the operator is a professional sports team or is contracted by a professional sports team to operate a sports book.<br /> <br /> CONSUMER PROTECTIONS<br /> <br /> This bill requires an operator to, among other things:<br /> <br /> (1) Establish and display the odds at which wagers may be placed on authorized sporting events;<br /> (2) Provide instructions for all types of sports wagering the operator accepts;<br /> (3) Not impose a minimum or maximum withdrawal limit for the account of an authorized sports bettor;<br /> (4) Maintain records for each sports wager placed with the operator for not less than five years from the date on which the sporting event occurred; and<br /> (5) Cooperate with investigations into a violation of this bill to the extent prescribed by the commission.<br /> <br /> This bill defines "authorized sporting event" as any professional sport or athletic event, any college or university sport or athletic event, or any Olympic sport or athletic event sanctioned by the International Olympic Committee, but does not include horse racing.<br /> <br /> PROHIBITED ACTS<br /> <br /> This bill prohibits an operator from accepting a wager:<br /> <br /> (1) From a prohibited sports bettor; or<br /> (2) On any sporting event that is not an authorized sporting event.<br /> <br /> An operator that violates (1) or (2) above may be charged with a gambling offense under present law.<br /> <br /> Under this bill, "prohibited sports bettor" includes, among others:<br /> <br /> (1) An officer or employee of the commission;<br /> (2) An individual with access to information that is known exclusively to prohibited sports bettors, when the individual wishes to place a wager directly relating to that information;<br /> (3) An individual who is physically located outside this state; or<br /> (4) An individual who is under 18 years of age.<br /> <br /> This bill prohibits a public education institution from entering into any advertising or sponsorship contracts relating to sports betting.<br /> <br /> ONLINE SPORTS WAGERING PLATFORMS<br /> <br /> This bill requires an operator accepting wagers through an online sports wagering platform to, among other things:<br /> <br /> (1) Require persons starting an online wagering account to create the account in-person at the operator's physical sports book location or through an identity verification process;<br /> (2) Utilize geofencing or similar technology to ensure that persons placing wagers are physically located within this state; and<br /> (3) Use commercially and technologically reasonable means to independently verify the age and identity of a person creating an account on the operator's online sports wagering platform or making a deposit to or withdrawal from an account.<br /> <br /> CIVIL PENALTIES<br /> <br /> An operator that violates this bill will be subject to suspension or revocation of the operator's permit or a civil penalty, or both. The commission may impose a civil penalty not to exceed: <br /> <br /> (1) $5,000 for a first offense;<br /> (2) $10,000 for a second offense; and<br /> (3) $50,000 for a third or subsequent offense.<br /> <br /> All penalties collected will be earmarked and allocated specifically for pre-K-12 grade education and deposited in the education trust fund.<br /> <br /> REFERENDUM<br /> <br /> Under this bill, the county election commission must call an election on the question of whether to authorize the operation of sports books in a city upon the receipt of: <br /> <br /> (1) A petition requesting the holding of such election signed by residents of the city in a number equal to or greater than 10 percent of the votes cast in the city for governor at the then last preceding gubernatorial election; or <br /> (2) A resolution requesting the holding of such election passed by the governing body of the city.<br /> <br /> Upon the receipt of a petition or resolution, the county election commission must set the date of the referendum to coincide with the next regular city election that is at least 60 days from the date of receipt of the petition or resolution. The operation of a physical sports book is approved if a majority of those voting on the question vote in the affirmative.<br /> <br /> DESIGNATION OF LOCATIONS FOR PHYSICAL SPORTS BOOK<br /> <br /> This bill requires a city's governing body to designate the areas of the city in which physical sports book locations may exist when the county election commission calls an election on the question of whether to authorize the operation of sports books in the city. Any expansion of the designated areas must be done through a city resolution designating the expansion and a subsequent referendum on the expansion. The expansion of designated area or areas will be approved if a majority of those voting on the question vote in the affirmative.<br /> <br />