After a long-awaited launch, sports betting is live in Tennessee. Sports betting was legalized in May 2019, but it has taken until now for operators to go live in the state.
Tennessee is the 20th jurisdiction in the US that now has sports betting. Four operators have a license in Tennessee, and there are plenty of promotions to use for those in The Volunteer State to sign up.
There are no casinos in Tennessee at the moment, so all of the betting occurs only by computers and mobile devices.
You can bet on plenty of sporting events on these apps in Tennessee. The state did not make the law banning any type of college betting, so those located in Tennessee will be able to bet on local colleges.
Operators in Tennessee
For the first weekend, Tennessee has FanDuel, DraftKings, BetMGM, and Action 24/7 live.
FanDuel is one of the most well-known names in the sports betting industry, and Tennessee is the ninth state where FanDuel mobile betting operates. Many people already had a fantasy account with the company, so they can use that same account for the sportsbook.
DraftKings is in a similar situation as FanDuel. Tennessee is the ninth state where DraftKings has obtained an operating license.
BetMGM launched in Tennessee, having an official sports betting partnership with the Tennessee Titans. This partnership is a huge advantage for the company as it tries to acquire customers. BetMGM is also known for the casino app, but that will not be offered in Tennessee.
Action 24/7 is the one brand in Tennessee that is locally owned. This sportsbook out of Nashville will only focus on operating in Tennessee for now, but it could decide to look elsewhere as neighboring states go legal.
BetAmerica, William Hill, and Wynn have also applied for a license but have yet to go live in Tennesse.
The cost of a license is $750,000, and there is no minimum number of licenses that will be given out. One of the reasons that keep operators from flooding the state is the 10% hold.
The 10% Hold
Tennessee sports betting operators must hold at least 10% of the betting handle. This percentage is the biggest obstacle that these operators will face. All of the approved companies can afford the $750,000 license, but the hold will be the real challenge.
The hold percentage means that 50/50 markets need to be close to -125. Will some sports bettors in Tennessee decide to stick with offshore sportsbooks because of that? We have seen what has happened in Washington DC with the expensive vig.
It is likely Tennessee operators will struggle somewhat, but the state doesn’t have much neighboring competition. The biggest worry will remain as an offshore sportsbook.
Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, and North Carolina are all bordering states that do not have mobile sports betting. The only state with sports betting that borders Tennessee is Virginia.
It will be interesting to see if how much this hold affects the market and what changes will be made moving forward.