After many months of waiting, Tennessee is finally ready to legalize sports betting. According to Tennessee Education Lottery CEO Rebecca Hargrove, sports betting will begin no later than Nov. 1.
In May 2019, Governor Bill Lee allowed a sports betting bill to become law without his signature. In the 16 months since that happened, Colorado, Illinois, Iowa, Michigan, Montana, and New Hampshire have all legalized sports betting.
Whenever Tennessee does finally get the green light on sports betting, it’s not going to be similar to most of those other states – not at first.
In the first year, many people believe that sports betting in The Volunteer State will feel like an experimental phase while it figures out all of the kinks. Oddly, it is going to be the only state which has an online-only format.
Costs for the Operators
It’s good to know that there isn’t a limit on the number of operators in Tennessee. Essentially, any operator can step up and put down $750,000 a year for the license. It would make sense to create a good battle so that customers could have the best possible betting experience. However, that might not yet be the case.
There is a lofty $20% tax rate on the bill for the required use of official league data. Not to mention, there is a mandatory hold that is applicable as well.
The regulators in Tennessee have an annual limit on payout percentages for sports betting operators at 90 percent. The state is owed a minimum hold of 10 percent from every sports betting operator, which is down from the original 15 percent that was proposed.
It will be tough to reach those numbers, as Delaware and Mississippi are the only ones with a 10-percent payout rate since June of 2018. However, Delaware’s hold isn’t as truthful considering it has a hold of just under 14 percent because of the parlay cards it sells at lottery retailers.
In fact, the only states with more than a billion dollars in sports betting handle since June 2018 are Indiana, Nevada, New Jersey, and Pennsylvania – all ranging from around 6-8 percent.
Overcoming the Issues
Back in January, the gambling consultant firm Eilers & Krejcik thought there would be other hurdles that Tennessee would need to overcome. Those included:
- Fewer operators that will have an interest in the market
- Customer won’t have to spend much money, allowing for more profits
- The overall slow growth rate for the market
Once things are up and running, Tennessee is going to flourish with its sports betting endeavor. That is if COVID-19 is all taken care of and not keeping people away from great tourist destinations like Nashville, Memphis, and Knoxville.
The Volunteer State is home to three different professional teams – the NFL’s Tennessee Titans, the NBA’s Memphis Grizzlies, and the NHL’s Nashville Predators. Of course, having that avenue of different sports betting franchises will only help in the long run.
