Why is the Tennessee sports betting market different to any other?

After sports betting went live in the state on November 1, 2020, we take a look at why the betting landscape in Tennessee is different to any other.

The Volunteer State became the twelfth state in America to legalize online sports betting, which came into effect on Sunday, November 1. This was a monumental moment for Tennessee and has opened up a whole host of new opportunities within the state.

The new betting landscape in Tennessee is a very interesting one and is very different to the current situations in other sports betting states such as New Jersey, Pennsylvania and Colorado. Here, we explain why.

1. Tennessee is America’s first online-only state

Unlike any other US state where sports betting is legal, Tennessee only allows wagering online, via mobile, computer or tablet. Given the current climate, this is unlikely to be an issue for the majority of sports bettors who can place their wagers on-the-go or from the comfort of their own homes. However, it does remove the social aspect of visiting your nearby brick-and-mortar sportsbook.

It is worth noting that mobile sports betting is the most popular method of wagering in the United States, with over 90% of sports bets in New Jersey and Pennsylvania being placed via smartphone apps. For now, mobile sports betting in Tennessee will be limited to four apps:

• DraftKings
• BetMGM
• FanDuel
• Tennessee Action 24/7 (still to launch)

2. Tennessee could prompt change in the South

Sports betting is virtually non-existent in the South, with Mississippi and Arkansas allowing in-person sports betting without providing mobile apps. Therefore, sports betting in Tennessee can become a geographical hub for the mobile wagering in the South and can prompt discussion in neighboring states about the potential for change.

Of neighboring states, only Virginia will have mobile betting when it is expected to launch early next year. The difference is, Virginia does not have the same passion for sport and stature of teams like Tennessee does. If sports betting is welcomed and loved in the Volunteer State, then why shouldn’t neighboring states at least consider the possibility of legalizing it?

3. The minimum hold rule in Tennessee is a wild card

The Tennessee Lottery oversees sports betting in the state and insisted on a lottery-style 10% minimum hold for all operators. This means that Tennessee sports betting operators must hold at least 10% of all betting handle they take. If they fail to hit that mark at the end of each calendar year, they could be fined up to $25,000. 

In order to combat this restriction and reach the 10% mark, many have said that pricing could suffer in markets such as futures, parlays and teasers. These betting types have the potential to hide juice and it’s perhaps the easiest way to avoid these fines at the end of the calendar year.