By
Jerry Smith
Staff Writer Updated: 05/01/2020
Jerry’s greatest advantage is his extensive experience on the casino floor. His time as a casino manager taught him everything about what makes a player tick. Besides being a skilled poker player, he has deep knowledge of all live table games and gambling regulations in the US.
Broadway (Nashville) Lights, Photo by www.123rf.com
Sports betting was approved in Tennessee back in July 2019, when Gov. Bill Lee failed to sign or veto the bill before the deadline came. Since then, the rules and regulations to govern the sports betting industry in Tennessee have been debated comprehensively, with many feeling that the process was being unnecessarily held up.
Now, however, the Tennessee Education Lottery – the organization tasked with running sports betting in the state – has finally come up with the rules and regulations. Speaking about this, Susan Lanigan, the board chair of the Tennessee Education Lottery, stated:
These rules reflect the significant work that went into establishing the processes and requirements for licensing and regulating interactive sports wagering in Tennessee. The board thanks the TEL and the Sports Wagering Advisory Council for their thoughtful help and guidance.
Undoubtedly the most controversial part of the rules is the fixed payout rate. This mandated that the operators would have to have a hold of 15%, however this was changed to 10% before the rules and regulations were approved. The subject of the hold rate will be revisited in a year, according to Lanigan.
This cap, according to many, means that Tennessee sportsbooks will end up offering worse odds than other states. Some even believe that the odds will be so bad that those living near the border of another state with legalized betting will cross the border and spend their money there. Alternatively, some could choose to continue betting via illegal channels.
When it comes to taxation, it remains the case that Tennessee sports betting companies will pay a tax worth 20% of their gross income. This is around average for sports betting throughout the country, which should be attractive to betting companies that are considering a launch in the Volunteer State.
The rules also state that the fee for a Level I license, which is the license all sports betting operators will be required to hold, will be $750,000 – other states have fees of millions, so the figure set in Tennessee should be no problem betting companies.
Suppliers will be forced to obtain a Level II license, which will cost $75,000, while contractors, subcontractors and independent contractors will require a Level III license, which will cost $7,500. In addition, those wanting a Level I or Level II license will have to pay a non-refundable application fee of $50,000.
Another notable rule is the fact that the Lottery will have 90 days to approve or deny applications. Also, sportsbooks will have to have all marketing material approved by the Lottery before it can be published.
Perhaps the most notable aspect to sports betting in Tennessee is the fact that it will only be offered to online users. This means that there will be no retail sports books. This is a new departure in the sports betting world, and many will be waiting eagerly to see if this model of sports betting is an effective one.
It’s certainly the case that online betting is proving popular in other states though, with some states seeing figures showing that in excess of 80% of sports bets are made via online betting sites and apps. Online betting has also allowed many sportsbooks to continue making money during the COVID-19 pandemic, which has caused retail sportsbooks to shut down.
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