Tennessee online-only betting bill passes into law
Market will launch in July and allow operators to launch online betting products direct to consumer
Tennessee has become the first state to greenlight an online-only betting law after state governor Bill Lee passed a bill into law without offering his signature on the legislation.
The market is expected to go live in July, with licenses costing $750,000 and the state claiming 20% GGR in tax from each operator.
Licenses are not limited to any number of skins or casino partnerships and many have compared the framework to the UK’s open licensing regime.
However, operators will be forced to buy official league data, possibly increasing costs and squeezing margins.
Eilers analyst Chris Grove said: “The list of operators with national ambitions who will be able to justify writing off Tennessee is a short one, regardless of how unfavorable the climate is. But slim margins combined with the ease of access will likely create a market that will be brutally unforgiving of inefficiencies.
Smarkets, among other firms, has expressed interest in entering the market once its SBK sportsbook is ready to launch in the US.
VP of engineering Mark Miscavage recently told EGR: “We are definitely interested in having an open market like the UK so Tennessee is interesting to us, we’re still working on potential deals in NJ, West Virginia and keeping an eye on some of the other states like Massachusetts, Virginia, Iowa.”
Source: Eilers & Krejcik Gaming
The Tennessee Lottery will set up a commission to oversee regulations, and projections have estimated the betting market could be worth up to $50m in the first year.
“It is really interesting to see the approach by Tennessee to only open up for online and mobile betting,” Better Collective CEO Jesper Søgaard said.
“Tennessee is one of the few states to not actually have any bricks and mortar operations within its borders, so to see the state’s interest in opening up via the online option illustrates that more states could move towards legislation based on the results they are seeing from others, rather than relying on their own experience from land based establishments.”