Tennessee has long been known for its strong tourist attraction.
With Beale Street and Graceland in Memphis, the music industry and
dynamic attractions of Nashville, the Aquarium in Chattanooga and
beautiful Smoky Mountains in East Tennessee, the state continues to
draw numerous tourists from all over the country, and beyond.
Gaming is not legalized in Tennessee. Tennesseans do, however, have
easy access to gaming outside the state. Tennessee has eight
contiguous states (Kentucky, Virginia, North Carolina, Georgia,
Alabama, Mississippi, Arkansas and Missouri). Three of those states
have legalized gaming (North Carolina, Mississippi and
Missouri).
The statistics show that Tennesseans have been streaming across its
borders to its sister states to take advantage of the gaming these
states offer. This fact, along with the millions of dollars
following Tennessee residents gaming in other states, has not gone
unnoticed by the Tennessee legislature.
Perhaps mindful of this, State Representative Jason Powell
submitted a bill to the Tennessee legislature last month. The bill
proposes that Tennessee allow casino gaming.
There has long been opposition in the legislature to gaming in
Tennessee. But for the first time in decades, a bill proposing
gaming in Tennessee received a second in the subcommittee where it
was introduced, and a discussion of the issues relative to gaming
took place on the Tennessee Capitol Hill.
Dickinson Wright partner Stuart Scott was asked by Representative
Powell to address the legislature. Mr. Scott did so and was able to
highlight for the legislature facts and statistics concerning
gaming, Tennesseans and revenue.
For example, Tunica, Mississippi, has gaming. It is located in the
northwest quadrant of the state. Between 2007 and the third quarter
of 2012, Tennesseans made up over 30% of the gaming patrons there.
During this same period of time, the data demonstrates that
Tennessee residents outpaced residents of the host state by more
than 50% at these Mississippi gaming sites. In fact, Tennesseans
outpaced patrons from every other state during this time.
Tennesseans are consistently willing to cross state borders to find
casino gaming – and take their tax dollars with them.
Tennesseans are gaming; they are simply doing so in other states,
and taking millions of dollars with them which could be used to
benefit the state of Tennessee.
Ohio provides a prime example of the enormous financial benefits
Tennesseans stand to gain from legalized gaming. Ohio opened four
casinos between 2012 and 2013. In 2014 alone, Ohio brought in
$268,000,000 in gaming revenue for its state.
In order to permit casino gaming, Mr. Scott explained to the
legislative committee, there must be an amendment to the Tennessee
constitution. While the process is lengthy, it permits time for
input by all involved and likewise allows for a carefully crafted
amendment that permits limited, intelligent gaming in precisely the
areas desired.
Some members of the legislative committee considering the bill were
also unaware of the control the State may exercise over gaming.
There has been some concern that permitting casino gaming in
Tennessee would have the same effect as authorizing the lottery
did. Of course, once the lottery was authorized within the state,
lottery ticket purchases were permitted ubiquitously.
Unlike the lottery, casino gaming can be controlled both in terms
of location and concerning the number of casinos allowed. Mr. Scott
explained that Ohio, for example, only permitted four casinos.
These four casinos, one in each of Ohio's largest cities,
brought in just under $64,000,000 in gaming tax revenue in the
fourth quarter of 2014 alone. Ohio has already received in excess
of one billion dollars in gaming revenue since the fourth casino
was completed in 2013.
Several of the legislators were unaware of the fact that the State
retains total control over how gaming revenue is spent. In its
current form, Representative Powell's bill will divide gaming
revenue between K–12 education and gaming addiction programs.
The state entities benefiting from gaming revenue, however, may be
supplemented. For example, city and county funds, property tax
abatement, infrastructure work and law enforcement support may be
considered, among a host of other positive ways to distribute
casino gaming proceeds among state agencies, which will benefit all
Tennesseans.
Following Mr. Scott's presentation, the committee broke with
what has become a long-standing tradition. Instead of killing the
bill promptly, the bill was sent for a fiscal study, which is to
take place in the summer of 2015. This is the first time in decades
a bill of this nature regarding casino gaming has been allowed to
proceed out of a subcommittee, Representative Powell confirms. A
discussion of issues relative to casino gaming in Tennessee may
begin later this year during the next legislative session.
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