Sports betting fans in Tennessee will soon be able to enjoy online sports betting in the state, something that offers residents of the state something of a unique opportunity.
This is because there is no offline gambling permitted in real-life casinos or betting shops in Tennessee. This alters the legal situation somewhat, as operators do not have to hold a retail gambling license as a precondition for holding an operator license. The law change will come into force in Tennessee and 18 other states on November 1.
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The state’s online gambling regulator is the Tennessee Education Lottery Corp. They have set a 90% cap on winnings, something that makes Tennessee a peculiarity in the American online gambling marketplace.
Betting expert Chris Grove, a partner at Irvine, California, based research firm Eilers & Krejcik Gaming, believes that this makes Tennessee “an outlier” that will be closely watched by operators in the American online gambling sphere.
“Tennessee’s competitive landscape is inherently less predictable than any other state,” he said.
The changing of the state law was not without controversy either. The Sports Gaming Act became law in the state on Jul 1 2019, but was passed without gaining the signature of State Governor Bill Lee.
Lee asserted that he felt online sports gambling was “not in the best interest of the state.” In the nine months following the passing of the law, a nine-member lottery corporation sports wagering advisory council was formed by state lottery officials.
In April 2020, new sports betting regulations in the state were approved, meaning that sports betting operators could now start to assess the range of new opportunities on offer in the state’s gambling marketplace.
An important thing for them, as well as bettors, to consider is the state requirement that operators hold at least 10% of the money accepted in bets. The 90% payout limit means that punters in Tennessee will probably end up with slightly worse odds than their counterparts in other states.
That makes the state a less appealing place for operators to do business than somewhere like New Jersey, for example, where there are payouts to bettors of around 94 to 95%. Operators may try to push punters towards parlay bets as a way of mitigating the situation’s effect on their profits.
Despite this and the existence of a $750,000 annual license fee, experts anticipate that Tennessee’s online gambling market will eventually grow to include around a dozen operators. Operators like FanDuel and DraftKings are expected to enjoy significant success, in part because they already have a well-established customer base in the state due to their forays into daily fantasy sports.
Interestingly, any company or individual that owns more than 5% of any professional, collegiate or Olympic sports team is barred from obtaining a license. That could prevent Golden Nugget Online Gaming, whose owner Tilman Fertitta also owns the Houston Rockets, from operating in the state.
What is certain, though, is that lottery officials have conditionally approved BetMGM, DraftKings, and FanDuel, along with local outfit Action 24/7, to operate in the state. Bettors can expect a bombardment of special offers soon to tempt them into enjoying some action.