The Tennessee Education Lottery last week took another small step toward implementing legal Tennessee sports betting when it issued a Request for Proposal for a company to vet potential sports betting operators. The RFP was issued Sept. 11 and bids are due by Thursday, Sept. 26. The chosen company will assist the Lottery in “assessing the financial stability” of any company that bids for and potentially applies for a sports betting license.
The Tennessee legislature passed mobile-only sports betting in April, and it became law about a month later. Governor Bill Lee declined to sign the bill, but didn’t veto it, which means it later became law. Since then, the state has taken small steps toward a launch, which at this point looks to be coming in the second half of 2020 or later.
Tennessee has no casinos or gaming other than a lottery, and as such is starting from scratch with regard to sports betting. In recent weeks, five people were appointed to the commission that will “enforce and supervise” sports betting.
TN moving slowly, deliberately
The latest action appears to show an extra layer of caution from the Tennessee Education Lottery. Most states vet potential vendors on their own. The RFP does not indicate when a vendor will be selected. The Lottery currently has a “Request for Application” available on its website for sports betting operators interested in setting up shop in Tennessee. Companies that fill out the application will be notified when the state begins seeking operators.
Among the key points in the current RFP:
- The selected company must vet each potential operator within 60 days of receiving said company’s financials;
- Potential operators will need to supply the last three years worth of audited financial statements, most recent annual and quarterly regulatory filings, bank statements and tax returns and reports to governmental agencies for the financial stability company to review; and
- The selected company must assess a potential operator’s “financial strength.”
Companies bidding on the current RFP must provide proposed compensation, an outline of how it will determine financial strength, and a sample report, among other documents.
— US Bets (@US_Bets) September 11, 2019
20% tax and data mandate
Tennessee’s new law, which went into effect on July 1, calls for a 20 percent tax rate on adjusted sports betting gross revenue and is the first in the nation to mandate the use of official league data, before Illinois became the second to do so later in the summer. The law does allow for betting on professional and college sports, though in-play prop bets on college sports is prohibited. Patrons must be 21 years or older to wager and the TEL, via it’s new committee, will be the regulator.
Tennessee has eight border states and so far, two of them — Arkansas and Mississippi — have live, legal sports betting. Georgia, Kentucky, Missouri, North Carolina and Virginia have all considered sports betting since the Professional and Amateur Sports Protection Act was struck down by the Supreme Court in May 2018. Of those five, Kentucky looks to be a decent candidate to legalize in 2020.
So far, Tennessee is the only state in the nation to legalize mobile-only sports betting.