BetMGM, DraftKings and FanDuel got conditional approval for sports betting in Tennessee Wednesday during a Special Meeting of the Sports Wagering Committee. Two other operators have applied — Tennessee Action 24/7 and an unnamed operator. It’s possible that both could get licensed before the Nov. 1 go-live date, as the TEL Board has additional special meetings scheduled for Oct. 5 and 16.
At the August meeting, President and CEO Rebecca Hargrove said that the TEL is aiming for a Nov. 1 launch date, and on Wednesday, she reiterated that that is still the plan.
Plenty of detailed questions on applications
BetMGM, DraftKings and FanDuel also all went live on the same day in Colorado – along with BetRivers. Colorado is so far the only other state that set a go-live date and launched multiple operators. Most regulators have conducted soft launch test periods and given green lights in more of a rolling fashion.
With regard to the licensing process, Lottery Board members spent more than three hours reviewing the applications and asking questions of staff before agreeing to grant conditional approval. Among the outstanding items that operators and Lottery staff will have to deal with ahead of launch are providing fingerprints, securing letters of reference from other states the operators are live in as well from law enforcement, clarifying some issues with regard to reserve accounts and insurance requirements, and completing/reviewing advertising and marketing campaigns.
The Tennessee Lottery Corporation is putting the final touches on bringing sports betting to our state. https://t.co/A4a1UPpLXU
— WSMV News4 Nashville (@WSMV) September 16, 2020
According to Lottery staff, the Tennessee Lottery has received letters of good standing for BetMGM, DraftKings and FanDuel from New Jersey and Colorado. The hope is to get similar letters from other states in which the operators are active.
Much of Wednesday’s discussion centered around reserve accounts and insurance requirements. Discussion was spirited as it is clear that while Board members are familiar with licensing requirements for lottery, the requirements or industry standards are different for sports betting.
Vice President of Sports Betting Danielle Boyd — who helped craft the West Virginia sports betting law and later headed up William Hill’s government relations department — clearly stated that granting conditional or provisional licenses is “consistent with what other jurisdictions” have done. Any operator who does meet the requirements of a conditional license will have the license revoked.
Action Tennessee 24/7 should be up next
The Board also approved geofencing company GeoComply for a supplier’s license as well as multiple vendors. Hargrove reminded staff, board members, and presumably any operators who were listening, that before an operator can go live, its suppliers and vendors must also be licensed.
With regard to operator licenses, it’s likely that Action Tennessee 24/7 and the fifth unnamed company will be considered for conditional licenses at one of the two special meetings set for October. Action Tennessee 24/7 is a local company, founded by Tennessee natives, that will offer its own mobile platform using tech from Amelco and Sportradar.
#SPORTS #Startups #MLB #Tennessee Our latest roundup includes updates on proposed @NashvilleStars @MLB team and on impending @TNLottery greenlight for @TNAction247 legalized sports betting visit >> https://t.co/tw0xCIRasr
— Milt Capps (@miltcapps) September 23, 2020
It’s likely to take the TEL and Action Tennessee 24/7 longer to complete the license application than other bigger companies, who are already operating in other states. The national companies not only have experience with filing rigorous applications, but regulators can look at their track records in other jurisdictions.
Background on Tennessee sports betting
Tennessee lawmakers legalized mobile sports wagering only on July 1, 2019. It is the only state that has legalized online/mobile with no retail sports betting. Legal gambling in Tennessee has so far consisted of only the state lottery and its traditional lottery products. It has taken the Lottery nine months to approve sports betting regulations, which include a controversial payout cap, that requires operators to hold a minimum of 10% of all player wagers, or put another way, paying out a maximum of 90%.
The Lottery included the cap in the hopes of maximizing revenue to the state, however such a cap will likely force operators to offer less attractive prices and payouts in certain areas in Tennessee than they would elsewhere.
Tennessee is one of three U.S. states with legal-but-not-live sports betting. The Virginia Lottery approved regulations on Sept. 15 and plans to begin accepting applications in mid-late October. The goal is for operators to go live in January 2021. In Washington, the first and only state to approve tribal sports betting only, lawmakers legalized sports betting in March, and the Washington Gambling Commission has not yet released proposed regulations.