Tennessee has targeted September 1 as the unofficial debut of online and mobile sports betting.
To get there requires sportsbooks. A trio of companies has submitted paperwork for a license. The Sports Wagering Advisory Council, a nine-member body created under the 2019 Sports Gaming Act to help the Tennessee Education Lottery, did not reveal the companies’ names.
The applications remain incomplete, but each of the companies formally declared their plan to submit one, which must be accompanied by a $50,000 nonrefundable fee. That fee will be applied to the licensing fee of $750,000. The lottery has 90 days to award a license.
In addition, 12 firms submitted completed applications for vendor licenses to provide various services directly to the sportsbooks.
Nashville attorney Tom Lee, one of the members of the Advisory Council, told TN Bets that while he thought the process should have moved at a quicker pace, the ultimate result should prove successful for bettors and the state.
“I think it’s important to get it right and make sure that our licensees are who we hope them to be and the quality of companies that we can trust to do well on behalf of the state,” Lee said.
An additional $750,000 annual licensing fee, combined with a 20 percent tax on adjusted gross income from sports wagering, are high barriers to entry, which may explain why so few expressed interest. Also a concern, however, is the preferred “profit” margin in Tennessee, which is requiring that the sports betting operation clear 10 percent, when a 5 percent profit in most operations is considered good. A 10 percent margin would mean that straight bets would have to have a -115 to -125 disadvantage to the player, which would encourage illegal sports betting to thrive.
Lottery Chair Susan Lanigan said the agency has begun the vetting process. The lottery hired a Secret Service veteran to help conduct background checks on interested firms.
