Tennessee Education Lottery Approves Mobile Sports Betting Rules

  • Tennessee Education Lottery’s board of directors approved the rules during a conference call
  • Fixed payout rate of 90% has proven to be very controversial 
  • Three types of licenses are available, TEL can consider an application for up to 90 days
  • Tax rate on gross income from sports betting is 20%, board must approve all promo materials
flag of Tennessee painted on grungy wooden background
The Tennessee Education Lottery approved the rules for mobile sports betting on Wednesday. [Image: Shutterstock.com]

Sports betting launch edges closer

The Tennessee Education Lottery (TEL) has approved the state’s mobile sports betting rules. As a result of this approval, operators can begin the application process to secure a license from next week onwards. 

The TEL’s board of directors voted on this issue on Wednesday through a video conference call. Speaking about this approval was the chair of the board, Susan Lanigan. She said: “These rules reflect the significant work that went into establishing the processes and requirements for licensing and regulating interactive sports wagering in Tennessee.”

operators can begin the application process to secure a license from next week

Lanigan went on to thank the Sports Wagering Advisory Council and the TEL for their help on the matter. The plan is to have sportsbooks ready to accept bets by the time most sporting events return to action.

Payout rate proves controversial

The most debated element of the new rules related to the fixed payout rate. Originally, this was set at 85%, but it has since been amended to 90%. This means that sportsbooks in Tennessee will keep 10% after all wagers have been settled.

Another controversial aspect of the draft rules was calling a push in a parlay bet a loss. In most other states, the bet would be voided, with the bettor’s original stake being returned. However, this did not make it into the final set of approved rules.

License fees and taxes

The license fee for sports betting operator licenses (Level I) has been set at $750,000. For supplier licenses (Level II), the cost will be $75,000. Level III licenses will cost $7,500 and are for contractors and subcontractors that will be offering services to the Level I and II license holders. Interested parties must also pay a non-refundable license application fee of $50,000.

After an application has been submitted, the lottery board can take up to 90 days to approve or decline it. There is no upper limit on the total number of licenses that can be issued once applicants reach all stability standards.

Operators will pay a tax rate of 20% on their gross income. These payments will be made each month. There are strict rules for advertising sportsbooks. All promotional material must be approved by the lottery board at least 30 days in advance of publishing.

Road to legal sports betting

It was in November 2019 that the draft rules for legal sports betting in Tennessee were initially published. The state legislature gave its approval for mobile sports betting in May 2019. It was shortly after that Governor Bill Lee allowed the bill to pass into law without his signature. 

Neighboring states Mississippi and Arkansas both have legal retail sports betting in place. Virginia is also set to have legal sports betting in the coming weeks. Tennessee will become the first state to only have mobile sports betting, with no retail operations permitted.

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