The State of Tennessee appears to finally be ready to launch sports betting, an effort more than 16 months in the making. Tennessee sports betting was officially legalized in May 2019, but it has taken the state a long time to get the industry up and running.
Earlier this week, three sports betting operators were granted a conditional license, signaling the first major step in launching the industry. Tennessee has set a target date of November 1 to launch sports betting officially.
Since the legalization of sports betting in Tennessee, six other states have both legalized and launched sports betting. The Volunteer State hoped to become a leader in the Southeast region, but they are now forced to make up ground.
The Process of Approval
The Tennessee Education Lottery Sports Wagering Committee held a special meeting on Wednesday night to review applications from sports betting operators. The committee spent more than three hours reviewing applications from BetMGM, DraftKings, and FanDuel.
These three big-name operators received a conditional license, and the committee is expected to take a final vote on Oct. 5. If the operators are approved, all three companies could be ready to go on the Nov. 1 target date.
The Sports Wagering Committee also approved the first supplier license as well as 26 different vending licenses. Tennessee sports betting operators are not allowed to offer betting until their suppliers and vendors have also met approval.
Other applications have been filed with the Sports Wagering Committee, and that group is expected to take action on these applications in October. For now, November 1 is still the targeted launch date, though it’s unclear how many other operators are set to join and will be approved by then.
Tennessee Sports Betting Rules
The first thing to note when looking at the current rules and regulations is that the entire Tennessee sports betting industry will be online. There are no retail casinos in the state, and therefore there will be no retail sports betting.
Mobile betting is the most popular form of sports betting throughout the industry in the United States, and it should produce similar large numbers in Tennessee. The problem is that the state has also adopted some rules that may keep some sports betting operators out.
The Tennessee sports betting industry will require a ten-percent hold on all sports betting action, and that is the highest hold rate in the nation. That rate forces sportsbooks to adjust their betting lines, and it will also limit the potential revenue they can make.
Tennessee is also charging operators a licensing fee of $750,000, which is also one of the highest costs in the country. All sports betting revenue in Tennessee will be taxed at 20 percent, which is also extremely high compared to other states.
With no limit to how many online-only operators can join the industry, it is anticipated that more applications will be submitted in the coming months.