Tennessee has finally approved licenses for its first three sports betting operators ahead of its November 1 launch date. DraftKings Sportsbook, BetMGM, and FanDuel Sportsbook are the first three operators to obtain their online-only sports betting license in Tennessee. The Sports Wagering Committee of the Tennessee Education Lottery authorized the licenses.
While speaking on the laborious work the Tennessee Lottery performed in order to prepare them for those decisions, Board Chair Susan Lanigan said, “We appreciate their efforts as we work to establish and support a responsible and competitive sports betting program in Tennessee.”
Tennessee Sports Betting is Long Overdue
It is fair to say that Tennessee has dragged its feet on launching sports betting in the state. In fact, the first bets on November 1 will be taken after a year and a half since sports betting was legalized in Tennessee last May. Meanwhile, as many as six states have not only legalized but also launched sports betting over this period.
Unfortunately, the Volunteer State missed huge tax revenue since then. It feels particularly bad when we look at the states that legalized the industry recently. For instance, Colorado sportsbooks struck the $100 million handle mark in the fourth month, and Illinois sports betting hit $50 million in its first month’s cycle with only one operator.
Another state witnessing a situation comparable to Tennessee’s in regulating an online-only market without casino gaming is Virginia, whose mobile sites are set to launch in January 2020. This is only around six months after the process to launch Virginia sports betting began in July, highlighting how long overdue and poorly handled Tennessee’s approach towards launching sports betting has been.
Other Interested Players in Tennessee
Plenty of other players are interested in embarking on the sports betting industry in Tennessee and many operators are impatiently awaiting the approval of their licenses in the state.
The state has offered low entry requirements as they merely cost $750,000 annually, with no cap on licenses allowed. However, the state will be the only jurisdiction with a holding requirement. It has been made mandatory that operators must have a 10% hold or face penalties or possible license suspensions. It’ll be up to the sports betting operators how to deal with this.
In addition, according to the previous forecast by Eilers & Krejcik Gaming, by implementing this holding requirement, Tennessee could miss out on $11 million in annual revenue. However, this figure was predicted when the proposed minimum hold was 15%, so the reduction may have since reduced the state’s losses slightly.