Despite the American sports world still suffering from a great deal of uncertainty, Tennessee is moving ahead with its efforts to launch online/mobile sports wagering this fall. On or around Sept. 1 is the unofficial target date, but the situation remains fluid.
On Monday, the Sports Wagering Advisory Council, a nine-member body that was created under the 2019 Sports Gaming Act to help the Tennessee Education Lottery implement legal sports wagering, met in Nashville for the first time since March.
The roughly 90-minute meeting featured discussion on the status of the upcoming sports wagering market. Three companies have submitted paperwork for a Sports Gaming Operator License. It’s unclear which three firms have moved ahead with their respective plans to enter the Volunteer State market, but they are “experienced operators” — or in other words, “not startups.”
$50,000 fee to get started
The applications are still incomplete, but the companies have formally indicated their plans to submit an application. A $50,000 nonrefundable application fee is due at the time of submission.
It’s expected that all three will complete the application process. The $50,000 fee would be applied to the sports gaming operator’s licensing fee of $750,000, the entirety of which must be paid within 10 days of approval of the license. Sports gaming operators will pay a $750,000 annually.
It’s expected to take a handful of weeks for regulators to issue a license to a company that submits a completed application. The Lottery has 90 days to award or reject a license.
In addition to the three sports betting brands that have submitted paperwork, Tennessee has seen 12 firms submit completed applications for a vendor license, a lower-level authorization to provide various services directly to the sportsbooks. Vendor fees owed to the state are substantially less.
Nashville attorney Tom Lee, one of the members of the Advisory Council, told TN Bets that while he had thought the ball would be a little farther down the field as of mid-June, the end is in sight and the final result should be a win for the state and sports bettors.
“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. “That matters more to me than [launching] on Sept. 1 or Sept. 15.”
Status of the sports world
The $750,000 annual licensing fee, combined with a 20% tax on adjusted gross income from sports wagering, are relatively high barriers to entry in the nascent U.S. sports wagering industry. Such an investment when the sports world faces uncertainty is likely the reason for the lackluster interest in the market as of mid-June. Last year during the process of passing the Sports Gaming Act, lawmakers were expecting a market comparable to Indiana or Pennsylvania in terms of the number of operators.
The Sports Wagering Advisory Council meeting also featured some discussion on eSports wagering, which was authorized under the 2019 law. One of the companies seeking to become a sports gaming operator is interested in taking action on eSports.
While less popular sports like golf and MMA have filled in the gap for sportsbooks in states that have already launched industries, the big three sports are what’s needed for a successful market. Major League Baseball, the National Basketball Association, and the National Football League are all working through their respective issues with regard to having games later in 2020.
Some fresh concerns emerged Monday surrounding the NFL, but football is still anticipated this fall.
Several #Cowboys players & several #Texans players have tested positive for COVID-19 recently, sources tell me & @TomPelissero. None of the players are believed to have been in their team facilities. The teams followed proper health protocols.
— Ian Rapoport (@RapSheet) June 15, 2020