Tennessee Sports Betting Goes Live With Four Sportsbooks
Collegiate Images/Getty Images. Pictured: Tennessee Volunteers cheerleaders lead the crowd in the stands at Neyland Stadium.
Tennessee online sports betting is now live, nearly a year-and-a-half after it was technically legalized.
Four sportsbooks — BetMGM, DraftKings, FanDuel and Tennessee Action 24/7 — launched ahead of kickoff for the NFL’s Week 8 Sunday games. Eligible sports bettors in Tennessee will be able to legally wager for the first time on college football games this week, starting with Mid-American Conference games Wednesday night and running through Saturday.
Bettors can now also wager legally on in-states programs such as Tennessee, which plays at Arkansas on Saturday evening.
Tennessee becomes the first state to launch an online-only sports betting market, as well as the first without a “tethering” requirement mandating sportsbooks partner with existing land-based gaming facilities. The Tennessee Education Lottery, which regulates the state’s legal sportsbooks, can theoretically grant an unlimited number of sportsbook licenses, including to local business such as Nashville-based Tennessee Action.
“This Sunday will represent the culmination of an enormous amount of work and due diligence to bring online-only sports wagering to Tennessee, the only state in the nation to do so,” said TEL President and CEO Rebecca Paul Hargrove in a statement before the Nov. 1 launch.
“As the regulator, today also represents the beginning of a new stage as we establish and support a responsible and competitive program here,” Hargrove said. “We will continue to work with all licensees, registrants and applicants to protect the consumer, promote fairness in sports and regulate this new Tennessee industry that provides critical funds to the state and local governments.”
Tennessee Betting Lines Remain Competitive – So Far
Sports bettors — and the industry at large — breathed another sigh of relief when the initial quartet of sportsbooks not only launched, but did so with competitive betting lines.
Tennessee regulators require sportsbooks hold 10 percent of betting handle, the only such mandate among the roughly two-dozen jurisdictions to approve legal sports betting. Stakeholders feared this would force sportsbooks to increase their vigorish or “juice” on bets, in turn forcing would-be legal bettors back to unregulated offshore sites or unlicensed bookmakers with more enticing lines.
For example, heading into Monday’s NFL game, Tennessee bettors could place a pointspread bet on the Tampa Bay Buccaneers at -12.5 or New York +12.5 at roughly -110 on either side, consistent with offerings at legal books in other states. Since sportsbooks typically hold between five and seven percent of handle, industry stakeholders feared the legal Tennessee sportsbooks would have to increase their respective vigs to roughly -125 aside on a pointspread bet to meet the hold requirement.
Going forward, it remains to be seen how the legal books will deal with the hold mandate, which doesn’t come into effect until 2021. The sportsbooks could keep betting lines on single-game wagers aligned with industry averages, for example, while increasing the vig on in-play bets, parlays, props and other wagers where the market rate isn’t as heavily monitored by value-conscious bettors.
The operators could also keep all their offerings along the market average and take the annual hold mandate violation fine of $25,000, a fraction of the multimillion-dollar monthly handles larger companies could expect each month in Tennessee.
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Multiple Sportsbooks Already Live in Tennessee
While the future competitiveness of the lines remains a question mark, Tennessee bettors should have no lack of legal options.
In addition to the four sportsbooks launched Nov. 1, three more operators – Bet America, Caesars-owned William Hill as well as Wynn – could all launch in the coming months. The uncapped number of licenses means these companies, other larger nationwide operators such as Points Bet and BetRivers as well as smaller, local operators like Tennessee Action, could come online as early as next year.
The 20% gross gaming revenue tax, one of the highest rates in the nation, plus a $750,000 annual fee, could dissuade some market entrants, but with four sportsbooks live and the aforementioned trio already applying, Tennessee will likely have at least seven sportsbooks next year, more than most states with legal mobile wagering.
Eligible bettors age 21 and up will also be able to place a wager through a mobile device anywhere within state lines. Tennessee is the 20th jurisdiction (including Washington D.C.) to open a legal sportsbook, but just the sixth where bettors can register for multiple online sportsbooks without having to complete the sign up in person.
Background of Tennessee Sports Betting
The Nov. 1 launch comes roughly 18 months after Tennessee sports betting passed into law and nearly two years after the bill to do so was introduced.
One of the nation’s most culturally and politically conservative states, Tennessee nevertheless passed its groundbreaking mobile-only sports betting bill with bipartisan support in spring 2019. At maturity, officials expect several billion dollars in annual handle and more than $100 million in annual revenues.
The ensuing sports betting rule-making and regulatory review process – in a state without any traditional retail gaming entities – would be the longest such undertaking of any state with legal wagering. TEL officials were still tweaking rules in recent weeks, and only approved the initial four sportsbooks a few days before they were set to go live.
Still, the launch went off without major issues and stakeholders both inside and outside the Volunteer State are hopeful it can pave the way for similar markets across the country.