Legal Tennessee Sportsbook Go Live by July
Industry insiders expect the legal Tennessee sportsbook to go live by July this year. The road towards legalization is long for sports betting in the state. In May 2019, Governor Bill Lee signed the bill into law that makes wagering on sports legal. However, regulators needed almost a year to finalize the rules and regulations.
Regulators released the regulations Friday. However, it included some rules that some stakeholders find too restrictive. For instance, the state will limit the amount a bettor can win at 90 percent of the original state. Tennessee becomes the first state to require books to have a 10 percent hold.
Nevada’s hold rate is five to six percent. During sports betting’s launch in New Jersey, its hold rate was around seven percent. Tennessee’s ten percent rule means that bettors are paying a steeper vig on their bets than in other states.
Legal Tennessee Sportsbook Rules
Based on U.S. political news sources, the ten percent hold means a -125 vig on each side of the typical wager. As a result, a bet of $125 will only win $100. Industry insiders predict that Tennessee will not get nine-figure handles each month, as seen in other states such as Indiana, Pennsylvania, and New Jersey, which don’t have a high hold rate.
Also, becoming a bookie in Tennessee means paying a licensing fee of $750,000. Also, the tax rate on sports betting revenues is 20 percent. Illinois has the steepest licensing fee at $20 million for online operators. In second place is Pennsylvania at $10 million. It is hard to imagine how bookies make money with expensive licensing fees.
Sportsbooks can apply for licenses starting next week. The Lottery will be responsible for overseeing sports betting in Tennessee. It will have 90 days to act on the applications. The state said that it would revisit the regulations after a year to see if it requires adjusting going forward.
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