The legal online sports betting dream in Tennessee will be realized by November or even earlier if preparations go as planned. It will be the first state in the USA to debut an online-only sports betting format.
After over a year of waiting, the Tennessee Education Lottery Cooperation (TEL) has finally confirmed that the state’s online-only sports betting program could go live by 1st November. The TEL went further to indicate that the online sports betting program could even debut much earlier should the suppliers and vendors complete their preparations for launch sooner. The good news was announced on Tuesday by Rebecca Hargrove, the Chief Executive Officer of the TEL.
Sports betting fans of the Volunteer State have been waiting for this opportunity since May 2019 when the final draft of the sports betting bill was enacted into law without Gov. Bill Lee’s signature. At that time, the governor said that he didn’t give his signature because he believed that permitting online sports betting wasn’t in the best interest of Tennessee.
Initially, regulators had expected that the interactive sports betting program would be ready for a September launch but the timeline wasn’t achievable. Meanwhile, in the 16 months that state officials have taken on the drawing board since the sports betting bill became law, six more states leaped ahead into the regulated sports betting market. New Hampshire, Montana, Michigan, Iowa, Illinois, and Colorado all legalized and launched regulated sports betting in their jurisdictions within that period.
Four Operators Have Already Lined up for Approval
Part of the functions of the TEL and its Board of Directors is the approval and licensing of operators, suppliers, and vendors who will be offering sports betting services to bettors in the state. At this moment, however, the board hasn’t okayed any operators for the soon to be unveiled online and mobile betting system.
Even so, Dave Smith the TEL Communications Director indicated that four operators have already completed their applications which will be reviewed by the board as the applicants wait to undergo background checks. Besides, in their June meeting, the TEL board okayed four affiliate marketing vendors, and they will take up 19 more applications from vendors in a meeting planned for this week.
Currently, only four sports betting vendors have been approved by the regulator, and they are; Wedge Traffic Ltd., dba Wedge Traffic Inc., Sports Betting ST, LLC, dba SBST, Media Players US LLC and Mark Knight, a sole proprietor for a marketing affiliate from outside the state.
How Will Tennessee’s Regulated Sports Betting Market Work?
Officials of the TEL green-lit the rules of sports betting back in April after months of mulling over different options, and creating a Sports Wagering Advisory Council with nine members as is required by the sports betting law.
Compared to the roadmap that other gambling-legal states follow for their regulated markets, Tennessee has taken a completely different direction. First off, the Volunteer State is the only state in the US that follows online-only setup for sports betting. All other stares require that online operators have to launch their online sports betting services as part of a skin of a retail sportsbook or land-based casino.
Moreover, Tennessee hasn’t placed any limits to the number of operators that can apply for a sports betting license which will cost $750,000 annually. The licensing process has a 90-days window, but the regulator mentioned that it will be fast-tracking this timeline so that applicants can receive their licenses much faster.
On top of requiring the licensees to use official league data for the sports betting services, there is a 20% tax rate for operators, a charge which a lot of analysts consider too high. But that’s not the most alarming bit of Tennessee’s sports betting regulations. TEL officials settled for a 90% annual aggregate fixed payout cap, meaning that operators must hold 10% of their handle as winnings. They had initially proposed minimum hold was 15% before it was reduced to 10%.
Industry observers assert that the 10% hold will limit the Tennessee market, as it may force sportsbook to either inflate moneylines or squeeze sides past the standard -110 so that they can retain the 10%. Any operators who violate the fixed payout cap will be faced with hefty fines or even license suspensions. Well, we just have to wait and see how it plays out come November.
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