Tennessee Eyes No Later Than Nov. 1 To Kick Off Mobile Sports Betting
Posted on: August 21, 2020, 01:01h.
Last updated on: August 21, 2020, 01:38h.
Tennessee officials expect sports betting to begin in the state no later than Nov. 1. That was the information presented to members of the Tennessee Education Lottery Corp.’s (TELC) Sports Wagering Advisory Council earlier this week.
The state has already received four applications from operators that it deems to be complete, TELC President and CEO Rebecca Paul Hargrove told the Council Tuesday. She did not name the applicants, saying their documents have been reviewed internally.
Financial information is currently being reviewed by a third-party vendor and background checks are underway as well, she added. Tennessee’s sports betting law requires the lottery to approve or deny completed applications within 90 days.
Hargrove said the applications were considered complete on Monday.
“We had introductory calls last week with each operator to discuss each of the applicant’s initial launch plans,” Hargrove said. “The purpose of the call was to discuss time lines and other issues, most pertinent to a go-live date. We will likely schedule several follow-up calls, finalize individual plans for launch in the near future.”
If possible, the lottery wants operators to start offering bets in October.
Tennessee passed its sports betting law last year. Unlike the other states, Tennessee’s law encompasses only mobile applications, as the state does not have any brick-and-mortar casinos or racetracks.
Sportsbooks Face Fine for Violating Hold
One of the more controversial measures in Tennessee’s law is the mandatory 10 percent hold that sportsbooks must meet. Some in the sports betting industry fear such a high threshold will cause books to offer worse odds. Rather than offer point spreads or totals at -110 (meaning a $110 winning bet nets $100 profit) sportsbooks may have to offer -120 or lower to meet the hold requirement.
Sportsbooks that can’t meet the 10 percent hold requirement face a $25,000 fine. TELC Chair Susan Lanigan said the lottery cannot impose a harsher penalty.
Now, if we get to the end of this first year, and all of our operators are happily paying their $25,000 and violating that hold, then we might have to try to figure out another way to enforce it,” Lanigan said. “But my expectation is that these folks are going to come in and try to do what they’re supposed to do and adhere to the rule and comply with it.”
Lottery officials, though, did not want to threaten a license suspension off the bat for fear that a “death penalty” might suppress interest, Hargrove said. If an operator has an issue in Tennessee, she noted, then they would suddenly have an issue in their other states as well.
Why Sports Betting Can Succeed in Tennessee
Tennessee is considered a lucrative sports betting market for several reasons. The state is home to nearly 7 million people, and its two major metropolitan areas – Nashville and Memphis – are home to four major professional sports teams. It’s also home to several prominent college teams, including the Tennessee Volunteers, which consistently rank among the top draws in college football.
Tennessee is also home to major tourism draws. Nashville draws country music fans and others by the droves with its lively downtown. It generates quite a bit of convention and conference traffic, too. And to the east, there’s the Great Smoky Mountains National Park, which attracts millions, and nearby Gatlinburg draws visitors from across the south and Midwest.
Those reasons mean we’ll likely see more than just the four operators Hargrove said have already applied launch in Tennessee at some point in the near future. Churchill Downs Inc. CEO Bill Carstanjen told stock analysts last month BetAmerica has the Volunteer State in its sights for next year.
While there is no cap on the number of sports betting operators the Lottery can approve, there is a $750,000 annual license fee for the right to offer wagering. Licensed operators also will be taxed at 20 percent of their adjusted gross income.
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