During a meeting yesterday, the Tennessee Education Lottery Corp Sports Wagering Committee granted its conditional approval for the first three sportsbook licences in the state.
Conditional approval was granted to BetMGM, DraftKings and FanDuel – however local operator Tennessee Action 24/7 completed an application, but was not reviewed at this time. Full approval is expected to be confirmed at the committee’s next meeting on October 5.
“Vendors, suppliers and operators have to be approved before moving ahead. Until the operator’s supplier is approved, the operator can’t go live,” commented lottery President and CEO Rebecca Hargrove during the committee meeting. “Some won’t be approved until our next meeting.”
In addition, the committee also approved its first supplier licence application at yesterday’s meeting, alongside an additional 26 vendor applications, though these are not yet listed on the Tennessee Education Lottery website.
During the committee’s last meeting on August 19, Hargrove suggested that the Tennessee sports betting market could open on November 1. However, there is a possibility that legalized wagering could begin sooner, possibly one or two weeks earlier, if the four operators who have applied can launch on the same day.
Tennessee is shaping up to be an interesting prospect for the US sports betting sector, with no terrestrial casinos within state lines, meaning that sports wagering will have to be a mobile-only affair. Added to that, state regulators have imposed a minimum hold of 10% on operators, a decision that some observers suggest will lead to less competitive odds for bettors and more in the way of parlay type offerings.
Failure to meet that minimum hold will trigger a fee and possibly a suspension of the operating license. While the rule appears harsh, it is an improvement on the initial recommendation of a 15% minimum hold.
As for entry to the market, operators will need to pay $750,000 annually for a license. Once operative they will be subject to a tax rate of 20% and will be mandated to use official league data. There is, however, no limit on the number of operators who may apply for a license.