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Tennessee Seeks Comments on Online Sports Wagering Regulations; Lawmaker Hopes for First Bets in April

The Tennessee Lottery on Friday unveiled its proposed draft sports betting regulations, the latest step toward becoming the first state in the country to legalize online wagering without requiring retail sportsbooks.

Beale Street in Memphis is one of Tennessee’s top attractions. Next year, people will be able to place sports wagers on their mobile devices there or anywhere else in the state. (Image: Rdikeman/Wikipedia)

Lottery officials will accept public comments over the next 30 days before deciding whether to make changes or pass the regulations as they were.

The document was released one day after the Lottery’s first Sports Wagering Advisory Council was held in Nashville. The board is scheduled to meet next on Jan. 14. It also comes after the announcement that Nevada-based gaming attorney Jennifer Roberts was hired to oversee sports betting for the lottery.

Roberts, who runs her own gaming law firm in Las Vegas, also served as the associate director for the UNLV International Center for Gaming Regulation.

While progress is being made, don’t expect the first bets to take place anytime soon. The state will not begin accepting license applications until after the regulations have been approved.

The lawmaker who led the charge to legalize sports betting in Tennessee told Casino.org that he expects the first applications to open in the spring.

Staples: No Need to Rush

State Rep. Rick Staples (D-Knoxville) said he initially hoped mobile apps would be available as soon as February. However, some of the steps involved in the vetting of applicants will take time, he said. That means now he’d be happy if the first bets were placed in April.

For Staples, as Tennessee moves into uncharted ground as a non-gaming state branching into online-only betting, it’s better to get it right the first time.

We want to make sure that it’s about the quality of the product and not rushing for any particular reason,” he said. “So if we are going to be ahead of the game, if we’re going to show other states how to do it, we want to at least be able to do it right.”

Tennessee’s law does not cap the number of sports betting apps the lottery can approve, and each successful applicant must pay an annual licensing fee of $750,000 to operate in the state. The state will also levy tax on 20 percent of the gross gaming revenues for each app.

The lottery’s education fund will receive 80 percent of the taxes, with 15 percent going to the state’s general fund and the remaining 5 percent funding problem gaming programs.

Details About Draft Rules

Tennessee’s law requires all sportsbooks to use official league data in scoring their live bets. That means licensees will need to become either official partners with the leagues or purchase rights to the data from an official league partner, such as Sportradar. The draft regulations, however, do call for an exemption if the books can offer proof that the leagues cannot provide the data at “commercially reasonable terms.”

The law also forbids in-game wagering on any collegiate event.

The draft regulations released on Friday also show some unique rules regarding parlay bets. Tennessee’s draft sports betting guidelines would not allow bettors to include prop bets or futures wagers, such as an in-season bet on the Nashville Predators to win the Stanley Cup, in a parlay.

Another draft regulation that might dissuade some bettors – if it’s enacted – is that any single event in a parlay that ends in a push would be scored as a loss. Typically, sportsbooks remove pushes from parlays and recalculate the payout from the remaining games.

Comments will be accepted through Dec. 23 and can be made online. The lottery will also make the comments available to the public for their review.

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