Tennessee Online Sports Betting Legal

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    The Volunteer State officially launched sports wagering fully online on Sunday, Nov. 1, 2020; legal online sportsbooks accepted their first wagers in the Volunteer State, making history. Compared to the evolution of other jurisdictions around the country, Tennessee’s gambling industry is still in its infancy.

    The process came together relatively quickly, with Rep. Rick Staples, a Democrat from Knoxville, pre-filing legislation, House Bill 1, late in 2018. The measure was taken up once 2019 began, and it moved through the legislative process with some hiccups before ultimately reaching Lee’s desk.

    The bill cleared the House by a 58-37 vote and the Senate, by a 20-12 vote. Some stiff opposition was offered by lawmakers opposed to gambling expansion in general, but the majority of elected officials agreed that it was time to bring sports betting out of the shadows and capture the tax revenue that was already taking place through illicit wagering channels. The Sports Gaming Act became effective July 1, 2019, however, it took the TELC some time to craft its regulations. Eventually, the industry took shape, and betting officially began on November 1, 2020.

    Concerns about responsible gambling have limited the legal gambling industry in the state for quite some time now. And, that’s the main reason why there are still no brick-and-mortar casinos in Tennessee, but unfortunately, those efforts haven’t been wildly successful at limiting the growth of gambling, however. On top of wagering on sporting events, Tennesseans can bet on horse races, buy lottery tickets, and play daily fantasy sports games. It’s unclear when gambling in Tennessee will expand again or what that will look like. If the recent past is any indication, however, the status quo won’t remain in place for long.

    Tennessee is distinct in that while sports betting is legal, there are no physical sportsbooks in the state.

    The Sports Wagering Advisory Council took over regulatory duties in early 2022 from the Tennessee Education Lottery. The council handles the licensing and regulation of the market, which appears likely to continue to expand with additional online sportsbooks.

    After officially opening with four legal online sportsbooks in November 2020, Tennessee has since expanded to nine. Bettors across the state can wager in a legal and safe fashion.

    Sports league data rule

    • The legislation requires “official league data” for the purposes of settling in-game wagers.
    • The law defines such data as “statistics, results, outcomes, and other data related to a sporting event obtained pursuant to an agreement with the relevant governing body of a sport or sports league, organization, or association whose corporate headquarters are based in the United States, or an entity expressly authorized by such governing body to provide such information to licensees for purposes of live betting.”
    • Sportsbooks are required to use such data as long as it is being offered to them under “commercially reasonable terms,” which remains to be defined.

    Basic Tennessee sports betting rules

    Here’s a list of some of the basic rules for betting on sports in Tennessee:

    • You have to be at least 21 years of age to bet on sports in Tennessee.
    • Tennessee offers an online-only sports betting market.
    • You have to be inside the state to place bets.
    • You can only have one account at each licensed TN sportsbook.
    • Betting on college sports is allowed, even games featuring Tennessee schools. However, live prop betting on college sports is not allowed in Tennessee. Prop betting on individual collegiate athletes is also not permitted.
    • Tennessee caps the amount sportsbooks can payout at 90% of the bets they take in annually. That means TN sportsbooks must generate a 10% hold for the year. As a result, the vig on certain bets in Tennessee may be higher than in other states where a 5-7% annual hold is most common.

    Tennessee sports betting law and regulations

    The US Supreme Court opened the door for individual states to legalize sports betting in May 2018. While Tennessee did not pursue legalization right away, the situation changed the following year, as a sports betting bill made its way through the Legislature.

    Sports betting officially became legal in the state in June 2019. It took a long time to get from that point to sports betting actually launching in the state. Rules and regulations finally went into place the following year, with online sportsbooks opening in November 2020.

    Here are some key aspects of Tennessee sports betting law:

    • The state taxes gross gambling revenue at a rate of 20%.
    • Licensees must pay $750,000 annually.
    • Sports betting is only available online, with no plans for retail sportsbooks.
    • Sportsbooks have a mandatory hold requirement of 10% on all wagers.
    • Sportsbooks must use “commercially and technologically reasonable procedures” to ensure minors don’t play.
    • Individuals involved with a sports league or organization are prohibited from wagering. People with access to material nonpublic information about athletes are also prohibited. Certain state officials are not allowed to partake in sports wagering. The TELC has a list of all persons and categories of persons excluded from wagering and distributes it to sportsbooks licensed by the state for compliance.

    Who’s in charge?

    • The bill creates a Tennessee Education Lottery Corporation Sports Wagering Advisory Council, composed of nine members. Three are appointed by the governor, three by the House speaker, and three by the Senate speaker.
    • Term lengths are two, three, and four years. A council member can be reappointed for another four-year term. They must live in Tennessee and must have experience in the sports industry, law enforcement, and/or accounting. The TELC is charged with promulgating regulations for the industry, but the council is required to assist it in the process. The council is required to meet at least once every quarter.
    • Regulators must submit an annual report to the governor on the sports betting industry. It must be submitted no later than Sept. 30 of each year. Most states release monthly information on wagering, but Tennessee is a little less transparent.

    Restrictions on betting

    • In-game prop bets on collegiate sports are prohibited, along with bets on injuries and penalties.
    • Sportsbooks are barred from extending credit to bettors.
    • The law gives the TELC authority to create advertising rules for the industry.
    • Sportsbooks are required to implement minimum problem/responsible gambling safeguards, such as allowing bettors to self-exclude or limit their time spent and amount bet on a platform.
    • Bettors are limited to one account per sportsbook.
    • Bettors can fund their accounts through debit cards, electronic bank transfers, online and mobile payment systems, or any other form of financing that is approved by regulators.
    • Regulators can issue an administrative fine against a sportsbook up to $25,000 for a regulatory violation, in addition to potentially suspending or revoking a license.
    • Leagues may also request that the TELC exclude a certain wager if there’s an argument pertaining to public policy or safety. Regulators will carefully consider a request.
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