NASHVILLE — Tennessee’s legal sports wagering industry won’t be ready for at least several months and potentially not even in time for the upcoming college and NFL football seasons.
The Tennessee Education Lottery Corporation and its Sports Wagering Advisory Council held a public meeting Tuesday afternoon in Nashville, discussing the draft regulations that were released in November.
Heavy industry feedback has slowed the process of finalizing the regulations for what will be the nation’s first sports wagering market that is online/mobile only. At the meeting, the TELC discussed a hotly contested component of the regulations pertaining to a proposed 85% sports wagering payout cap. That would mean online/mobile sportsbooks must have a 15% hold (win) against sports bettors.
The sports betting industry in New Jersey, by contrast, paid out roughly 93% of the betting handle to bettors in 2019. The Garden State’s industry, overseen by casino regulators and not the state lottery, is considered the gold standard for online betting in the nascent U.S. sports betting market. It doesn’t have a payout cap. The TELC acknowledged in January that the payout cap is “difficult and controversial.”
Tennessee sports gaming regulators indicated that the payout cap, which would be designed to boost revenue to the state, is still up in the air. Some involved in the regulatory process want no cap at all, while others are interested in raising it.
The TELC decided Tuesday to move toward setting a cap between 90% and 95%, but no official decision was made as to what it will be. Regulators will continue studying the proposed rule.
The TELC and its advisory council will likely meet again in March, planning by then to have a final draft of the regulations and potentially adopt them.
Timeline for launch
Tennessee sports betting was approved by the legislature in the spring of 2019. Gov. Bill Lee, a staunch critic of legalized gambling, let the legislation become law without his signature in May and it took effect in July. There were some early concerns that Lee would try to slow the roll-out of legal sports betting.
The primary sponsor of the gaming expansion legislation, state Rep. Rick Staples, told TN Bets last fall that sports betting could be live by the Super Bowl. That timeline didn’t hold, and the general consensus in recent weeks was that the first online/mobile books could launch in early summer.
Rebecca Hargrove, CEO of the TELC, said Tuesday that companies interested in applying to offer sports wagering statewide via the web are waiting for the regulations to be finalized before moving forward.
At the conclusion of the meeting, advisory council member Billy Orgel, who was appointed by the governor, asked Hargrove about the timeline for implementing sports betting in the state. Hargrove indicated that the TELC hopes to see the first sportsbooks launch in 2020. Orgel asked if betting might be live in the fall, and Hargrove was cautiously optimistic about the timeline.
Hargrove said legal betting definitely won’t be ready for March Madness.
In addition to the payout cap and other regulatory items, the TELC is working through forming the investigatory process for companies that will be involved with the market.
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