The Tennessee Education Lottery has approved rules and processes for mobile sports betting in the state, with minor tweaks to the payout percentage, and now aims to allow operators to begin applying for licenses next week.
The rules were approved by the lottery’s board of directors at a meeting Wednesday (April 15).
“These rules reflect the significant work that went into establishing the processes and requirements for licensing and regulating interactive sports wagering in Tennessee,” Tennessee Education Lottery board chair Susan Lanigan said. “The board thanks the TEL and the Sports Wagering Advisory Council for their thoughtful help and guidance.”
The most controversial element of the rules remains the fixed payout rate. While this was originally set at 85%, it has now been amended to 90%. This still sets a hold percentage of 10%, significantly above average rates in states such as Nevada and New Jersey.
The rules also set out a $750,000 fee for Level I (operator) licenses, which falls to $75,000 for Level II (supplier) licenses. These also come with a $50,000 nonrefundable application fee.
A Level III license, which covers contractors, subcontractors, or independent contractors that provide services to Level I or II licensees will cost $7,500.
The lottery board will have 90 days to approve or deny an application once the submission is deemed complete. There will be no limit to the number of licenses that may be issued, provided all applicants meet the state’s suitability requirements.
The tax rate for operators remains 20% of gross income, to be paid on a monthly basis.
Marketing also remains tightly controlled, with all promotional materials to be approved by the lottery at least 30 days before they are published.
The draft rules were first published in November 2019, with the mobile wagering bill passed by the state legislature in May 2019 and allowed to pass into law without Governor Bill Lee’s signature later that month.
“We enter a new phase of this undertaking, and on behalf of the Advisory Council, we look forward to continuing to provide advice and assistance in support of best practices for Tennessee,” the state’s Sports Wagering Advisory Council chair Billy Orgel said.
The lottery’s president and chief executive Rebecca Hargrove, meanwhile, thanked Lanigan, Orgel and the board and advisory council.
“We will continue to work with all parties involved to protect the consumer, promote fairness in sports and regulate this new Tennessee industry that provides critical education funds to the state.”