NASHVILLE, Tenn. (AP) — The Tennessee Lottery’s leader expects the state’s first online-only sportsbooks to go live no later than Nov. 1.
At a board meeting Wednesday, Lottery CEO Rebecca Hargrove said four operators have submitted completed applications to date.
She said their financial info has been sent to a third-party vendor and she hopes background checks will be completed by mid-September.
Hargrove said it’s possible betting can start a week or two earlier if all of the operators are ready and background checks come back quickly enough.
Tennessee’s sports betting law passed narrowly in spring 2019. Republican Gov. Bill Lee let it become law without his signature.
Jennifer Roberts resigned from her position as director of Tennessee’s sports betting program in June before Tennessee’s first bets were placed to join video game gambling company GameCo.
According to an article from legalsportsreport.com, Tennessee is the first state to cap the annual payout percentage of each betting operator at 90%, meaning sportsbooks must take 10% of each dollar wagered.
When payout percentage cap of 85% was initially proposed in January, a gambling consultancy firm estimated Tennessee could miss out on $11 million of annual state revenue due to the rule. Experts fear the rule could dissuade operators from joining the Tennessee marketplace and push bettors to seek better prices from out-of-state vendors.
A spokesman for Lt. Gov. Randy McNally said in April, “While the state could conceivably raise the cap at some point in the future, it would be difficult to lower once expectations were set.”
“Lt. Governor McNally believes a 90 percent cap is fair, equitable and in the state’s best interest,” McNally’s spokesman, Adam Kleinheider, said in his statement.
In a previous meeting, Hargrove said including a cap would ensure a guaranteed amount of profit that is taxable for the state. She also said it would protect an equal playing field for sportsbook operators by ensuring large companies don’t run at a deficit in the short term to secure a big share of the market.
Jennifer Roberts, then lottery’s sports betting program director, recommended having no cap so the state can be “fully competitive with the illegal market.” But Roberts said that if there is a cap, it should be 95%.
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