Tennessee Becomes First Online-Only Sports Betting Industry in US
Tennessee has become the first online-only sports betting industry in the US and the 20th overall as it went live on Sunday.
For now, four operators have been approved to take legal bets, while more will soon enter the market. The Volunteer State offers online-only sports betting service, with no physical betting allowed here, setting it apart from the sports betting operations in other states.
Online sports betting became legal in Tennessee, which has no land-based gambling venues, on July 1, 2019. Tennessee Education Lottery Corporation approved sports betting rules in April. It then took ten months to create and formalize sports betting rules for the official launch on November 1.
Until now, it has been a common qualifier for the 19 other states to have a framework of casinos or possession of a retail gambling license as a precondition to operate an online sportsbook, yet Tennessee breaks this trend with a new approach.
What Sports Can You Bet on in Tennessee?
Tennessee residents will only have internet sports betting option. Anyone over 21 and physically present in the state will be able to place wagers through the internet using a mobile device or computer. The Volunteer State has offered a full slate of sports to bet on, including the NFL.
In addition, kiosks and retails sportsbooks in Tennessee are barred from establishing any type of physical presence for taking bets, which is unprecedented as the other 19 states had regulated retail sports betting before or simultaneously when launching mobile betting. So, the Volunteer State has become the first state to allow online-only wagering
Tennessee Education Lottery has approved 27 sports and 100 events to bet on, besides allowing betting on Tennessee college teams. Interestingly, the state has offered residents the option to wager on some events that are considered illegal in other states. Tennessee did not ban betting on in-state colleges, which means people can wager on like the University of Tennessee Volunteers. The only exception is a bar on prop bets for college sports.
How Does Tennessee Sports Betting Work?
All sports betting in Tennessee must take place via the internet, and you don’t have to be a resident of Tennessee to place a legal wager. However, you must be physically present in the state to place a bet on a Tennessee sports betting app.
The Volunteer State’s first four online sportsbooks are BetMGM, DraftKings, FanDuel, and Action 24/7, which all went live on Sunday at 12:01 AM amid the NFL season, and just ahead of the 2020 Masters Tournament that will kick-off on November 12.
Entering the Tennessee sports betting industry with a $750,000 annual license fee seems an open invitation as the Lottery has not capped the number of operators in the state, so it may seem surprising that only four sportsbooks have launched. However, the license fee means sportsbooks need to take a minimum of $7.5 million in annual handle merely to break even. With no cap on licenses, small operators find it difficult to see prospects of profitability in the market.
In addition, Tennessee is making sports betting operators have a 10% hold, which is unusual for the industry, some experts consider this an anomaly. This requirement for sportsbooks again explains why Tennessee kicks off its sports betting launch with just four operators. The hold could negatively affect smaller operators seeking an edge in market share.