Slowly but surely, Tennessee is moving towards kicking off online/mobile sports betting
Last week, the Tennessee Sports Gaming Act became codified as Public Chapter No. 507, another step in the process before betting on games can kick off. The million-dollar question is when the state-sanctioned online/mobile platforms will launch. No one has the answer yet. Some have speculated that it could coincide withe start of football season, but that could very well end up being an aggressive forecast considering that TN doesn’t have experience with Las Vegas-style gambling. There are no casinos or racinos in the state.
In order to implement legal sports betting, state lawmakers gave regulation responsibilities to the Tennessee Lottery Corporation, which is about 15 years old. That move was done to make sure the governor wouldn’t veto.
Under the law, which becomes effective July 1, there will be a sports betting “advisory council” to help the lottery with implementing sports betting (crafting rules and regulations). Commercial enterprises (such as a FanDuel) will be allowed to run sports betting in Tennessee under a license with the lottery.
Tenn. Republican Gov. Bill Lee, who said he opposes gambling but was willing to let the state bring sports betting out of the shadows, will get to pick three of the nine members of the advisory council. None of those members have been selected yet. It’s unclear how long that process will take, as the Tennessee Bureau of Investigation will have to complete background checks and vet those appointed.
Members of the council cannot have a direct pecuniary interest in the sports wagering or gaming industry, but they are required under law to have experience in the “sports industry.”
The council must elect a chair.
While the 21-page new law provides the framework for how sports wagering will be implemented, regulators were given discretion on the finer details, especially with regards to maintaining game integrity. Given the lack of experience with casino-style gaming, crafting regulations might take a little longer in Tennessee. The bill also mandates that to-be licensees “official league data” for in-game wagering, a controversial requirement that has not been implemented in any state yet.
To complicate matters, the new law allows for some wiggle room on the data issue:
“A licensee shall exclusively use official league data for purposes of live betting unless the licensee can demonstrate to the board that the governing body of a sport or sports league, organization, or association or other authorized entity cannot provide a feed of official league data for live betting in accordance with commercially reasonable terms, as determined by the board.”
As for licensing operators, regulators have 90 days are receiving an application to complete an extensive background check into the company and its principals and relevant employees. Licensees, which will pay $750k annually for sports wagering, are required to have their servers within Tennessee.
The Tennessee sports betting regulations will be robust. For example, the state will adopt rules specific to the manner in which a licensee may advertise sports wagering.
In terms of problem gambling awareness and resources, Tennessee appears to be on the progressive side of the spectrum. There’s a 20% tax rate on sports betting gross revenue. For every $100 in taxable sports betting dollars, $1 will go toward helping problem gamblers. It will make a difference.
One thing that could slow the launch of online/mobile platforms is that sports bettors in the state will be allowed to “restrict themselves from placing wagers with the licensee, including limits on the time spent betting and amounts wagered,” according to the text of the new law. That’s a robust anti-problem gaming feature.
Furthermore: “The board shall promulgate rules that require a licensee to implement responsible sports wagering programs that include comprehensive training on responding to circumstances in which individuals present signs of a gambling addiction.”
For all the aforementioned reasons, don’t bet on Tennessee online sports betting this football season, but it’s certainly not impossible. The work that Tennessee officials are able to complete this summer and fall will shed light on when a launch is possible. Let’s not forget that Pennsylvania, which has long had a casino industry, took about 18 months after legalizing online sports betting before the first app launched.
A more realistic timeline for TN’s launch might be August of next year, in time for the 2020-21 NFL season. For a state like Tennessee, it might actually be a smarter play to not rush the launch.