Tennessee finally licensed its first three sports betting operators as it plans for a Nov. 1 launch.
BetMGM, DraftKings Sportsbook and FanDuel Sportsbook were the first sportsbook operators to get their online-only sports betting license in the state. The licenses were authorized by the Sports Wagering Committee of the Tennessee Education Lottery.
“The staff at the Tennessee Lottery performed a tremendous amount of work and due diligence to prepare us for these decisions today,” Board Chair Susan Lanigan said. “We appreciate their efforts as we work to establish and support a responsible and competitive sports wagering program in Tennessee.”
The committee will meet again Oct. 5 and Oct. 16 to license other operators for sports betting in Tennessee before the launch.
Tennessee sports betting is long overdue
To say Tennessee has dragged its feet on sports betting would be quite the understatement.
It’ll be nearly a year and a half since legal sports betting in TN became law in May 2019 when the first bets are taken Nov. 1.
To put that into perspective, six states have legalized and launched sports betting over that time. The state has missed significant tax revenue since then, especially when looking at the recently legalized states. Colorado sportsbooks just blew by the $100 million handle mark in its fourth month while one operator essentially led Illinois sports betting to more than $50 million in handle in its first full month.
Virginia, which is in a similar situation as Tennessee in legalizing an online-only market with no casino gaming, will launch in January. That’s about six months after the process to launch Virginia sportsbooks began in July.
Others interested in tricky TN market
There should be plenty of other sportsbook operators anxiously awaiting their license in Tennessee.
The state offers low requirements for entry. There’s no cap on licenses allowed and those licenses only cost $750,000 annually.
There would likely be more without the state’s unfortunate catch, though. Tennessee becomes the only US sports betting state with a hold requirement. Operators must have at least a 10% hold or face fines or possibly license suspensions.
It’ll be up to the operators to decide how that is dealt with. One option could be increasing the juice, but that immediately puts operators at a disadvantage with offshore operators. Plus, just look at sports betting in DC to see how sports bettors are skipping Intralot‘s overpriced online platform for a retail William Hill book.
Consultancy Eilers & Krejcik Gaming previously forecasted Tennessee to miss out on $11 million in tax revenue annually, though that was when the proposed minimum hold was 15%.