Mobile and online sports betting is now legal in the state of Tennessee. The state has introduced the first online-only model in the U.S. with legal sportsbook apps currently projected to launch sometime by Nov. 1, 2020. As of mid-August, four operators have applied for licenses in Tennessee, and Tennessee Education Lottery CEO Rebecca Hargrove says the goal is to launch all four at once.
The state’s law took effect in early July 2019, with Gov. Bill Lee allowing it to become a law without his signature.
Historically, Tennessee has not been known as “gambling friendly.” There are no retail casinos in the state, nor are there plans for that to change. Therefore, setting up a complex betting apparatus has been a slow and deliberate process. After months of careful research and debate, the official launch for online sports betting in Tennessee is finally on the horizon.
This page will serve as a way to keep players apprised of all progress within the Tennessee online sports betting market. We’ll let you know which sportsbooks are coming, how to sign up, and most importantly, when it goes live.
Online & mobile sportsbooks in Tennessee
Four operators — BetMGM, DraftKings, FanDuel and Tennessee Action 24/7 — have already applied for licenses, and they will be the first four to go live in the state. We will update this space accordingly as sites confirm their presence in the state. There is no limitation on how many operators can receive a license, so as long as a sportsbook is approved by regulators, they’re welcome in Tennessee.
The goal is to launch sports betting the way that Colorado did on May 1 — with all eligible operators going live on the same date. Hargrove did say at the latest TELC Board meeting that if all or most of the operators are ready early, the launch date could be moved up. In Colorado, four operators — BetMGM, BetRivers, DraftKings and FanDuel — all went live on the same day and others have gotten license approval and launched as they have been ready. Tennessee will likely have a similar situation.
Given this leniency, we expect to see most the major players that currently conduct online sports betting operations in other states, along with a few niche books, to enter the mix.
Tennessee was the first state in the country to pass online-only sports betting legislation. With no brick-and-mortar casinos or racetracks, moving forward with a mobile-centric sports betting platform makes a lot of sense for the state.
Unfortunately this means that there won’t be any land-based, retail sportsbooks. Some casino-less states, like Virginia for example, actually approved its first casinos while pursuing sports betting. Tennessee did not. For now, and the foreseeable future, the state will boast a mobile-only sports betting industry.
The lack of retail outlets is not expected to impede growth. In other states with both land-based and online delivery channels, online betting accounts for a large majority of wagers placed. New Jersey, which is one of the most developed sports betting industry’s in the U.S., has been regularly accepting more than 80% of its wagers online.
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Laws and regulations
Sports betting across the United States became a possibility when the U.S. Supreme Court, ruling on a lawsuit filed by New Jersey, overturned the Professional and Amateur Sports Protection Act (PASPA) in May 2018.
The 1992 law was originally enacted to define the legal status of betting nationwide, outlawing the practice in all but a few states — Oregon, Delaware, and Montana — that had established sports lotteries, and Nevada, which had full-fledged sports betting.
When the high court ruled in favor of the Garden State’s challenge in 2018 it gave the green light to all other states to approve, and implement sports wagering.
Since then, many new states have passed fresh legislation and are up-and-running with legal sports betting – New Jersey, West Virginia, Pennsylvania, Indiana, Illinois, Michigan, Colorado, and now Tennessee are just a few on the growing list of states that have embraced sports betting post-PASPA.
Key highlights (and lowlights) of Tennessee’s sports betting laws include:
- Oversight provided by the Tennessee Education Lottery Corporation
- Max payout capped at 90% (mandatory 10% hold)
- No retail sports betting allowed
- The licensing fee is set at $750K annually, with money going toward education
- Gross gaming revenue will be taxed at 20%
- Betting allowed on professional leagues and NCAA sporting events
- The state requires agreement with leagues to use official data for in-play wagers
- Bettors cannot place props or in-game/live wagers on college sporting events
- The law allows bettors to restrict or self-exclude so they can protect themselves from a gambling addiction or problem.
The industry is regulated by the Tennessee Education Lottery Corporation, in accordance with a new Sports Wagering Advisory Council, that will advise the lottery corporation on various topics including tech assistance and best practices. The group is expected to meet quarterly.
The TELC has undergone some personnel changes on the road from legal to live. Director of Sports Betting Jennifer Roberts came from UNLV in November 2019 and resigned from the TELC in June 2020. In early July, former William Hill Director of Government Affairs and ex-General Counsel in West Virginia Danielle Boyd was hired as Vice President of Sports Betting. Boyd was instrumental in crafting West Virginia’s sports betting law.
Setting the rules – minimum 10% hold
Establishing Tennessee’s sports betting rules has been a process, to say the least. Effectively legal since July 2019, the rollout has been labored. The state lottery released a preliminary set of rules in November, and then listened to critical feedback before appointing a nine-person board to make the final changes. Included in the problematic November document was a proposed “payout cap” of 85%, or put another way, a mandatory hold of 15%.
After several months the Tennessee Education Lottery Corporation approved and released the state’s final sports betting rules on April 15, 2020. The new rules lowered the controversial hold figure from 15% to 10%. It’s an improvement, no doubt, but is still well above industry standards and the only such requirement concerning a licensed business’s hold percentage in any U.S. jurisdiction. The rule states:
The aggregate annual payout of each Licensee shall not exceed 90%.
This means that over the course of a year, sportsbooks can pay out no more than 90% of what they take in. For context, the booming Nevada sports betting market usually returns around 94.5% to bettors. The required 10% hold will undoubtedly trickle down to Tennessee bettors in the form of inferior pricing — whether it’s in parlay or futures payouts. The advisory board is able to change this figure as early as next year.
Should operators fail to meet the 90% hold rule, they can be fined or have their licenses suspended. At the August TELC Board and Sports Wagering Advisory Council meetings, the penalty was a key discussion point. The law allows for up to a $25,000 fine, and the Advisory Council approved that number — but what’s in question is how often the fine could be imposed. The Advisory Council discussed whether the $25,000 could be imposed annually or more often. In the case of a repeat offended, both the Advisory Council and Board agreed that suspension is another tool available, but that both prefer not to have to suspend a license, as this could potentially affect an operator’s ability to do business in another state.
In addition, the Board reviewed a dispute-resolution directive from the Advisory Council. The directive calls for players to first bring any issues to the operator directly. If the issue is not resolved, a player could escalate the dispute to TEL staff, TEL CEO Hargrove, the Advisory Council and finally to the full Lottery Board. The goal for any operator — and the TEL — would be for disputes to be resolved at the operator level, but the Advisory Council was required to put the process into place.
Tennessee sports betting: Frequently asked questions
Is sports betting live in the state of Tennessee?
Not yet. The current estimate for mobile sports betting is Nov. 1, 2020. There will be no retail sports betting in Tennessee.
Who can place a real-money sports bet in Tennessee?
Bettors must be 21 years of age to place a sports wager in Tennessee. That is the age limit in most states that have legalized sports betting.
Additionally, bettors need to be located in the state of Tennessee before they can place a wager. You can be geolocated via WiFi or a 4G mobile connection, but if the sportsbook can’t locate you, you can’t bet. We do predict that you’ll be able to create an account, view lines, and conduct other account management tasks without physically being located in Tennessee – though placing a bet will be reserved for those in-state.
Anyone who meets these requirements is eligible to wager, you don’t have to actually live in TN.
How many online sportsbooks will be available in Tennessee?
Considering there is no limit on how many operators can apply for sports betting licenses, we foresee a competitive market with roughly a dozen active sportsbooks.
With a high annual licensing fee and a 20 percent tax rate, Tennessee is not the friendliest climate for sports betting operators. Yet, the inhospitable landscape in Pennsylvania hardly deterred big-name operators like FanDuel, DraftKings, and FOX Bet from entering the mix, and we suspect it won’t in Tennessee.
Smaller and mid-sized operations may not see a path to sustainability and could bow out of the market.
Will mobile sportsbooks offer bonuses for new players?
Undoubtedly. One of the primary marketing devices of online sportsbooks, especially in new markets, is to offer new players lucrative welcome packages. Check this page out frequently for exclusive promo codes.
How will I deposit and withdraw funds online?
One of the main benefits of legal sites is that they make it exceedingly simple to get money on (and off) line.
Based on payment methods offered in other markets, we should see the following deposit methods, at minimum:
- ACH (eCheck): Load funds directly from your connected bank account.
- PayPal: Connect your PayPal account in order to make instantaneous deposits.
- Online banking: Use your existing bank login credentials and connect with its portal.
- Pre-paid cards: Sportsbooks will likely offer branded pre-paid cards that double as ATM cards.
- PayNearMe: Deposit cash in-person using retail stores in your area. 7Eleven, CVS, and Family Dollar all participate.
The one payment method that won’t be available is cash at the casino cage, simply because there are no casinos or racetracks in Tennessee.
What bet types and betting markets will be available?
There are no major restrictions on what markets sportsbooks are allowed to support, outside a ban on in-play wagers for college sports. Expect to see lines offered for all major pro sports (NBA, NHL, MLB, NFL), college basketball and football, golf, tennis, soccer, and some niche offerings like cricket and darts.
Sites should offer old staples like point spreads, totals, money lines, futures, props (game and team), parlays, teasers, and in-play, and also some niche products like DraftKings’ Flash Bet, FanDuel’s correlated parlays, betting pools, and more.
What is the history of gambling in Tennessee?
The state government of Tennessee has consistently held a firm grip on all forms of gambling. Poker rooms and casinos are non-existent.
Horse racing flourished in the 1800s but a ban on betting killed off in 1906.
In 2003, a lottery referendum was approved to support education. The first drawing was made in 2004, and remains very popular.
In 2010, limited and licensed charity bingo and lottery events were approved.
Fantasy sports were approved by lawmakers in 2016 with the passage of the Fantasy Sports Act.
In 2019, Tennessee passed its online sports betting law.
How legal sports betting came to be in Tennessee
Tennessee’s final sports betting legislation was borne from bills introduced in 2018 in both chambers of the Tennessee legislature.
The state’s history of tepid interest in gambling overall and Gov. Bill Lee voicing his opposition to widespread gambling expansion prompted a compromise between he and the state’s General Assembly.
Sen. Steve Dickerson (R-Nashville) and Rep. Rick Staples (D-Knoxville) introduced SB0016 and HB0001, respectively, to allow online sports betting.
On April 24, 2019, the House passed the legislation 58-37. The Senate agreed to accept the House bill with amendments and it was approved with a 19-12 vote. Tennessee is the first state in the U.S. to approve a mobile-only sports betting model. The legislation was sent to Gov. Lee’s desk where it was returned without his signature on May 24, 2019.
His accompanying letter said “I do not believe the expansion of gambling through sports betting is in the best interest of our state, but I appreciate the General Assembly efforts to remove brick and mortar establishments. … We see this issue differently but let me be clear: my future efforts to expand gambling or introduce casinos in Tennessee will assure my veto.”
The legislation became law on July 1, 2019.
It took 9 months, but the Tennessee Education Lottery Corporation approved the state’s final set of sports betting rules on April 15, 2020. The switch is expected to be flipped sometime from July – September 2020.