Legal sports betting is finally set to launch in Tennessee, although an official start date has not been set. Tennessee Education Lottery CEO Rebecca Hargrove announced that sports betting will begin by November 1st at the latest. Still, the hope is that the industry is launched in time for the 2020 NFL regular season.
Governor Bill Lee let a sports betting bill become a law without signing the bill back in May 2019, but it has been slow to launch. There have been six other states that have legalized and launched sports betting in the 16 months it has taken Tennessee to get things going.
Even though Tennessee is set to launch sports betting later this year, the state is doing it in a very unconventional way. Sports bettors are excited to be able to place bets, but operators are still taking a slow approach to launching in Tennessee.
Tennessee will be the first and only state in the US with an online-only option when the industry launches. There is not a set a limit on the number of operators in the state, but they have set a $750,000 licensing fee to apply.
The state hoped to create a competitive market by not limiting the number of operators but has yet to see a ton of applications. Official league data is required for any operator to land a license, and that will keep some operators from being able to apply for a license.
Tennessee also has placed a 20 percent tax rate on all sports betting revenue, and that number is a lot higher than it is in some other states. Not forcing sportsbook operators to partner with a casino is a nice gesture, but they still put some restrictions on these operators.
10 Percent Fold Will Be in Effect
Another factor that will set the new sports betting industry apart in Tennessee is the 10 percent hold that will be in place. This means that sports betting operators will have their annual payout capped at just 90 percent.
State lawmakers proposed a 15 percent hold in the first creation of the bill, but the final number was lowered to 10 percent. Sportsbooks that choose to launch in Tennessee will likely be struggling to get to that 10 percent threshold.
Delaware and Mississippi are the only two sports betting markets that have hit the 10 percent mark since 2018. That doesn’t mean that it can’t be done by operators in Tennessee, but it’s likely to be a challenge, especially at first.
The Sports Wagering Advisory Council in Tennessee discussed potential penalties for operators that don’t hit the 10 percent hold, and fines or suspensions could be in place. These fines could add up quickly and could scare some operators away.
Sportsbooks will likely have to charge different juice on betting lines other than the -110 that is standard. This could scare some bettors away as well, once again costing the state some valuable revenue.