Tennessee is still planning to launch sports betting later this summer or early this fall ahead of — or around the time of — football season.
As of this week, however, the Tennessee Education Lottery has yet to receive any Sports Gaming Operator License applications from sports betting firms interested in offering legal wagers, TN Bets has learned.
A Sports Gaming Operator License in Tennessee will cost $750,000 annually. Additionally, there’s a 20% state tax on a licensee’s adjusted gross income from the wagers by people 21 or older and physically present within state borders,
In April, the TEL adopted extensive sports betting rules and regulations for the industry. Last month, the TEL said that it had received dozens of questions from firms interested in the market.
TN Bets was told Tuesday by a spokesperson that the TEL is continuing “to work with potential applicants and registrants on any questions they may have.”
An applicant for a Sports Gaming Operator License must submit a nonrefundable fee of $50,000 at the time the application is submitted.
Failure to submit the $50,000 application fee would cause the application to be rejected or cause a delay in the processing. Upon approval of the application, the $50,000 fee would be applied to the Sports Gaming Operator’s licensing fee of $750,000.
The $750,000 must be paid within 10 days of approval of the license.
Payouts, sports in limbo
The Tennessee market was complicated by regulators putting in place a 90% “capped payout” over an annual period. It’s the first of its kind in the nation, though it’s been implemented in some overseas markets. It requires a sportsbook to retain 10% of its annual handle in the form of winnings. It’s not clear if or how sportsbooks will adjust their respective products to meet that requirement.
Markets without that cap typically see a win percentage of 5-7%.
It’s unclear whether the payout cap is the reason why no Sports Gaming Operator License applications have been filed yet. The cap was widely criticized by the sports betting industry.
The market for sports wagering in the U.S. is tough right now, given the lack of baseball and basketball. While the NFL is expected to go forward in the fall, both the NBA and MLB have yet to iron out plans to have games in the second half of 2020.
The NBA is close, however.
The NBA is planning a Thursday vote of the Board of Governors — with an expectation that owners will approve Adam Silver’s recommendation on a format to re-start the season in Orlando, sources tell ESPN.
— Adrian Wojnarowski (@wojespn) May 29, 2020