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4 Tennessee Sportsbooks Open, Must Follow Weird Rules

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Tennessee, The Volunteer State, has officially become the 20th U.S. state to launch a sports betting market for its residents. The first TN sportsbooks went live at 12:01 a.m. local time on Sunday, Nov. 1, coming more than a year after the law authorizing them was passed. It was in May of 2019 that that bill was passed through when Governor Bill Lee allowed it to become law without his signature of approval.

Despite it taking such a long period of time to officially be launched, sports betting is now legally accessible in Tennessee. However, it comes with its own share of odd rules and regulations. Could this really be something that works for The Volunteer State, or has Tennessee pretty much shut down sports betting within its borders before it has really even begun?

Tennessee Sports Betting Begins

Four Licensed Sports Betting Operations to Start

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Starting things off in Tennessee, four sports betting operators have been confirmed and began offering their services on Sunday. Those are the BetMGM brand, DraftKings sportsbook (which also operates daily fantasy sports and has recently become the official partner of the NFL), FanDuel, and Tennessee Action 24/7. The first three are global gaming companies while the last is a local firm active only in Tennessee.

There were also three other operators that applied for sports betting licenses although they weren’t able to launch on Sunday. Those three operators were confirmed to be BetAmerica, which is owned by Churchill Downs, William Hill, which has been consistent with its attempts at expanding in the US market, and Wynn.

Of course, there was likely to be a reason why the original four went live on Sunday. It was an NFL betting Sunday, meaning that it held much more appeal for potential customers than any other day of the week. And while Tennessee Action 24/7 initially had a bit of trouble with getting enough insurance coverage, thereby not guaranteeing it a launch on day one, it managed to get through all the necessary details to secure such a position in time.

Sports Betting Possibilities in Tennessee

At the four sports betting operations, as well as the three other applicants once they launch, residents can access a full selection of sports to bet on. This includes the aforementioned NFL (which features the Tennessee Titans) and NCAA college football.

Unfortunately, the Titans came out of Sunday’s game against the Cincinnati Bengals on the losing end with a finish of 31-20 in the Bengals’ favor. Hopefully, the Titans can pull some wins out of the bag in the future and give hometown fans a reason to bet on them.

Of course, while it’s great that the NFL and NCAA can be wagered on, all other major sports can also be found via the aforementioned sites. In fact, Tennessee is allowing its bettors the possibility of wagering on various events that are actually outside the law in many other US licensed sports betting states. For example, it’s possible to place bets on the Olympics from within Tennessee as well as eSports. That being said, to offer bets on eSports requires the individual approval of each league and the matches connected to such.

It’s also true to say that Tennessee managed to avoid a mistake that has been experienced in other states. It chose not to ban betting on in-state colleges, meaning that anyone opting to engage in sports betting can wager on their favorites from within the state’s borders. The only real restriction on college athletics is that live, in-game prop bets on such contests are not allowed.

Unprecedented Rules in Effect

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While there are various positives about the legalization and introduction of sports betting to Tennessee, there are also certain strange rules that have been introduced at the same time. Some of these rules and regulations are exceptionally unusual for the United States and its sports wagering markets.

For example, Tennessee is the very first of the 20 states and jurisdiction to legalize sports betting that is regulating online sportsbooks only. This means that everything will be online rather than having the framework of land-based casinos or retail gambling locations as a precondition for obtaining licensure. That’s a common norm for sportsbooks within the other locations that have already launched such gambling possibilities. So Tennessee not following suit with this makes it stand out somewhat though this is perfectly understandable as the state currently hosts no casinos or racetracks.

Not only that, but the licensed sportsbooks operating within Tennessee have to abide by a 90% cap on payouts as well. That is, they must retain 10% or more of the total betting action placed with them.

This is perhaps the most bizarre rule surrounding sports betting in this state, and it’s one that no other state has implemented. The first-of-its-kind 10% hold requirements means that sports betting is definitely going to be taking a different route to what has become the norm for the industry across the US, which has started springing to life in the past couple years following the overturning of the PASPA legislation in 2018.

U.S. Supreme Court Justices at Time of Murphy DecisionThe Supreme Court Overturned PASPA, Paving the Way for Expanded Licensed Sports Betting

Through the 90% cap, Tennessee essentially requires its gambling operators to retain at least 10% of the money accepted in bets. That figure stands at about double what sportsbooks hold as revenue throughout the sports betting industry overall. Establishing a minimum payout threshold as a consumer protection measure might make some kind of logical sense, but forcing sportsbooks to collect a minimum vigorish appears to be an idea that came completely out of left field.

Impact of the Minimum 10% Hold

Analysts have suggested that this move is likely to mean that Tennessee sportsbooks will have to include slightly worse betting odds as a way of meeting the hold requirement. Experts believe that only a small number of bettors will be able to notice the difference, but this basically means that the industry will be fleecing users who are unsophisticated in evaluating the odds presented.

Meanwhile, CMO of FanDuel Mike Raffensperger spoke of wanting to keep the experience of sports betting the same across its sportsbooks found in different states. At the same time, DraftKings President Matt Kalish mentioned that his company wants to give consumers in Tennessee the best experience possible within the regulations written into law. He said that it is hoped that odds can be kept as similar as possible throughout the operator’s sportsbooks.

One way to present a similar product in Tennessee as the rest of the world is by leaving the odds on normal wagers alone and instead promoting futures and parlays. These types of bets naturally have a bigger margin for the bookmaker built in, so it may be possible for operators to achieve the desired 10% hold figure more organically through the proper marketing and promotion of these types of bets.

Tennessee Sportsbook Licensing and Operation

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All sports betting taking place in Tennessee has to occur online either via a smartphone app or website. Furthermore, you don’t need to reside in Tennessee to participate although you do need to physically be within its borders. If the sportsbook app cannot confirm that you’re inside the borders of the state, you won’t be able to access one of the legal and licensed platforms.

To be able to operate sports betting in Tennessee, brands must pay out $750,000 annually for a license. The Tennessee Lottery, which oversees sports betting in the state, also isn’t capping the number of operators that can apply for and obtain a sports betting license. However, the fact that a 10% hold must be adhered to by all operators is likely why only four platforms have launched and three more are in waiting.

Not a single operator has announced how they intend to manage that hold percentage yet. When you combine that hold with a 20% revenue tax rate as well as the fact that official league data is necessary to use, everything isn’t all sunshine and roses with Tennessee’s setup.

Essentially, operators must take at least $7.5 million in annual handle just so that they can break even on the licensing fee charged. That’s before any additional costs are covered as well, and with no cap on the number of licenses being handed out, smaller brands may find it to be an unprofitable route for them to take.

This means that sports betting might not be quite as successful as initially hoped. It also augurs poorly for an eventual launch of other regulated gaming, like online poker and casino platforms. For the foreseeable future, those who wish to partake of internet poker in Tennessee must head to international sites that are licensed elsewhere.

Potential Customers Looking Elsewhere?

While the fact that all sports betting will take place online or via mobile device in Tennessee likely won’t be an issue, the rules surrounding the 10% hold could be quite detrimental. If bettors within Tennessee can only obtain a maximum of 90% in winnings while other states and offshore sites don’t have such rules, what appeal is there in joining the local TN platforms?

Imagine having the possibility of selecting between a Tennesean online sportsbook that has rules on the amount you can win or accessing an offshore platform that doesn’t incorporate any such regulations. Can Tennessee really sustain such a sports betting market?

Offshore Platforms as an Alternative


There are numerous offshore sports betting sites that are accessible to residents of Tennessee already as well. And they’re not restricted by strange rules like the ones based within the state are. Some of these provide an enthralling sports betting experience for you, and you can find the most recommended ones by reading through the ProfessionalRakeback guide to sports betting in the USA.

We’ve got information on platforms like, which features its own casino and poker room too. Otherwise, you may wish to register for an account at the Bovada platform, which is well-known throughout the United States. This one provides exciting sports betting opportunities for you to enjoy whilst also offering casino and poker games also.