The US state of Tennessee has become the 20th in the country to offer sports betting, after a long and winding path to legalization.
The law that authorized sports betting in the state originally passed in May 2019, a year after the Supreme Court struck down the 1992 PASPA Act that prohibited sports betting. The process was then dogged by legal and regulatory delays, but sports betting customers in the state finally have the ability to bet on their favorite sports without having to cross the state border.
Four online sports betting companies were given permission to offer betting products at the launch date: FanDuel, DraftKings, BetMGM, and Tennessee Action 24/7. According to the Tennessee Education Lottery, BetAmerica, Wynn, and William Hill had also applied for a license but were not ready to go at the launch date. In addition, Action 24/7 had experienced difficulties in securing sufficient insurance, leading to a delay in its preparations to launch.
One notable feature of the new sports betting market is that Tennessee sports betting customers will be able to bet on the full range of sports. This includes betting markets involving the Tennessee Titans NFL franchise and NCAA college teams within the state. As well as the ability to bet on all the major sports, including pre-season matches and drafts, there will also be the option to bet on a variety of sports that have not been offered in other states.
This list includes the ability to bet on Olympic events and on esports contests, although the latter will be subject to the approval of each of the esports leagues. Tennessee customers can also bet on in-state college events, although there is a limitation to prop betting on college sports.
Another notable feature of the new sports betting market is that all betting has to be done through mobile devices. Some states have based their sports betting sectors on existing casino venues, in some cases delaying the ability to bet online, but as there are no casinos in Tennessee, this interplay between the land-based casino sector and sports betting, which has been the source of some friction in a few states, has not come into play.
While a customer does not need to be an official Tennessee resident to bet on sports events, they will have to be located inside the state borders in order to use one of the Tennessee sports betting apps. This is verified through the use of GPS technology, and if the sportsbook app is unable to verify your location, you will not be able to bet.
The good news for sports betting operators targeting the Tennessee market is that there is no upper limit on the number of operators who can provide sports betting in the state. The bad news is that the state has introduced an unusual 10% minimum hold, alongside a 20% revenue rate tax. It is not yet clear how operators will navigate the hold issue, but that is the likely explanation for the relatively small number of companies who have sought licenses in the state.
At the same time, Tennessee remains an attractive location in the short term due to the lack of mobile sports betting in neighboring states. Of the eight bordering states, only Virginia has legalized mobile sports betting, and that market has yet to launch, meaning that betting customers from Arkansas to North Carolina may take the option of crossing into the Volunteer State to place their mobile bets.
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