Can Tennessee Provide a Blueprint for Idaho Sports Betting?

Dan Favale
By , Updated on: Aug 8, 2023 12:00 AM
Could Idaho sports betting follow in the footsteps of Tennessee’s gambling legalization?

Right now, at this moment, more than 30 states in the USA have some form of legal sports betting. Idaho, of course, isn’t part of this list that includes a majority of the country. That’s not expected to change anytime soon, either. Most experts believe Idaho sports betting is no more than a distant possibility as we navigate the second half of 2023.  

It’s time to start thinking about how that can change rather than if or when it will.

These hypothetical conversations are uncomfortable for some and annoying for others. They prefer to traffic in concrete news updates. Reality as we know it, though, doesn’t allow for the most in-depth or regular Idaho sports betting developments. And that’s because there are none. Sports gambling didn’t even register as a secondary priority during the most recent round of legislative sessions. It isn’t even clear whether the subject was approached at all. 

Hence the question at hand: Is there anything within reason that can change the tenor and future trajectory of sports betting in Idaho? Experts and analysts are generally at a loss. But after much thought, we believe an answer could form by looking at the legalization of sports betting in Tennessee.

Could Idaho Sports Betting Pass with Just Online Legalization?

Following Tennessee’s lead would mean legalizing only online sports betting. And make no mistake, this is an extremely unique approach. Tennessee is so far the only state to legalize just online sports betting without any in-person gambling options. 

Why did Tennessee go this route, you might ask? The answer: for a multitude of reasons. 

First and foremost, Tennessee governor Bill Lee was staunchly against sports betting in general. Green lighting mobile wagering alone was seen as a compromise. This way, the state would only be working with many of the best online sportsbooks in the USA that they hand-selected to operate inside the region. They also wouldn’t need to worry about approving and then regulating a bunch of on-site retail locations throughout the state. That, in turn, allowed Tennessee to more neatly fit sports betting into their state lottery system. Oftentimes, when states legalize both online sports betting and in-person wagering, they need to create an entirely independent infrastructure to monitor it. 

These are all potential upsides that could appeal to Idaho officials. Policymakers have previously cited the tediousness of properly setting up sports betting services. They have also expressed concern about how an influx of additional brick-and-mortar operators can be more difficult to regulate and, by extension, perhaps predatory. Leaning into online sports betting alone addresses those concerns while ensuring that the state should be able to tack on regulatory procedures to their lottery system. 

As Tennessee is more recently proving, these aren’t the sole benefits, either.

Tennessee is Making Waves in the Online Sports Betting Industry That Could Help Idaho

Earlier this summer, Tennessee made sports betting history by enacting a bill that taxes gambling handles rather than pure profit. Here’s more from Yogonet: Gaming News:

Tennessee Governor Bill Lee has signed a new sports betting bill into law making the Volunteer State the first and only in the US to tax sports betting handle rather than gaming revenue. The law, which will take effect in July 2023, introduces a tax rate of 1.85 percent on the total handle of legal online sportsbooks, a significant departure from the previous tax structure of 20 percent of gross gaming revenue. The new law follows a prolonged controversy surrounding the state's requirement for sportsbooks to maintain a minimum hold of 10 percent on their handle. While lawmakers argued that the hold was beneficial for tax revenue and fostering competition, sportsbooks contended that it hindered their operations within the state.

Taxing the entire handle is a move that should appeal to Idaho sports betting supporters. Detractors so often argue that there isn’t a big enough market to capitalize on taxes from sports gambling revenue. Idaho ranks around 37th out of 50 states in population, and they do not have a single professional sports franchise inside the market. But The Gem State stands to make much more money if they tax entire handles, which are simply the total amount of wagers accepted.

Let’s use Tennessee as an example. In June 2023, online sportsbooks in Tennessee took $230.3 million of wagers. Taxing that at the current 1.85 percent rate would result in roughly $4.3 million. That’s about the same as what a 20 percent tax on sports betting revenue would be.

In Idaho’s case, however, they could simply nudge up the tax rate to 2 percent or maybe even 3 percent. The difference could wind up making them millions of dollars extra a year.

Would Idaho Ever Consider Legalizing Online Sports Betting Alone?

On the heels of Tennessee’s new tax structure, industry experts have started discussing among themselves whether other states without sports betting may follow suit. Idaho has naturally come up in those conversations. 

The general consensus: Idaho would not consider legalizing online sports betting without in-person options.

This comes as a bummer in many respects, but it’s also understandable. Online-only options appeared to Tennessee in large part because the state doesn’t house any casinos. Idaho has casinos whose operators won’t want to be left out in the cold. 

Still, the model in Tennessee should absolutely be something Idaho considers in 2024. If they’re that worried about the maintenance of legal sports betting, an online-only approach helps simplify the process. And they don’t have to leave tribal casinos out in the cold. They could negotiate a compact that allocates part of the state’s gambling revenue to those operations. 

Is this a proposal that could push Idaho sports betting into existence? We can’t know for sure. But it might start a discussion—which, frankly, would be passive progress in itself.

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Meet the author

Dan Favale

Dan first began writing about sports back in 2011. At the time, his expertise lied in the NBA and NFL. More than one decade, that remains the case. But he's also expanded his catalog to include extensive knowledge and analysis on the NHL, MLB, tennis, NASCAR, college ba...

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