The wait may soon be over. Tennessee legalized sports betting way back in the spring of 2019. Now, close to a year-and-a-half later, the first Tennessee sportsbooks might finally start accepting wagers by November, or even before.
That’s what Tennessee Education Lottery (TEL) CEO Rebecca Hargrove announced at the TEL’s Board of Directors meeting last week.
Four sportsbooks set to launch pending approvals
Hargrove reported at the Board’s Aug. 19 meeting that four operators have submitted applications to operate the state’s first sportsbooks. The operators’ financial information has now been sent to a third-party vendor for review.
Hargrove said she hopes those evaluations will be completed by mid-September.
“At this point, I’m pleased to tell you we’ll start no later than Nov. 1, and potentially a week or two ahead of that if we can get all of the background checks back from the folks who have them,” said Hargrove.
Once those checks on operators are completed, the Tennessee Education Lottery Board will then consider each application. The TEL has up to 90 days to approve or deny applications for the Tennessee sportsbook apps.
According to Hargrove’s timeline, then, Tennessee bettors could start placing wagers by the second half of the football season.
While four operators’ licenses are being reviewed, the TEL has already approved nearly two dozen vendors and suppliers.
Announcement punctuates lengthy process to establish rules
It was late May 2019 when Gov. Bill Lee returned the Tennessee Sports Gaming Act (SB 16) to the General Assembly without his signature.
His decision not to veto the bill approved by both the state House and Senate allowed it to become law automatically. The law officially went into effect on July 1, 2019.
The law places the Tennessee Education Lottery in charge of overseeing sports betting in the state. The TEL released its first draft of sports gambling rules and regulations in November 2019.
A public comment period followed, and in April 2020, the TEL Board of Directors unanimously approved the final rules and regulations.
Among the regulations ultimately adopted was a 10% minimum hold rule, thereby capping payouts at 90%. That rule is unique to Tennessee and a higher hold than is typical for most states with legal sports betting.
However, it is not as high at the 15% hold initially entertained by regulators.
The Board also discussed the hold requirement at last week’s meeting, considering whether and how to assess a $25,000 penalty to operators that fail to maintain the 10% hold.
Tennessee sportsbooks will be able to take bets on a wide range of professional and collegiate sports.
Sportsbooks cannot offer prop bets on college players, however.
Other operators play wait-and-see with Tennessee
Also making Tennessee different from other states will be the fact that all sportsbooks will operate entirely online, with no retail sportsbooks.
That opens the door to a wide range of potential operators, both from Tennessee and elsewhere. There is no limit on the number that can seek licenses.
With a population of nearly seven million, Tennessee will be an inviting state for some online sportsbook operators.
However, there is a $750,000 initial fee to apply for a license and $50,000 annual renewal fee. The new law also imposes a 20% tax on sports betting revenue. Another cause for some operators to wait and see may well be ongoing uncertainty regarding sports this fall.
For now, bettors should keep their calendars marked for Nov. 1.