Geographically positioned in the American Southeast, the 36th-largest and 16th-most populous state in the United States borders Arkansas and Missouri to the west, Kentucky and Virginia to the north, North Carolina to the east, and Georgia, Alabama, and Mississippi to the south.
Upon joining the Union in 1796, Tennessee became recognizable by a few notable details.
The state is the birthplace of country music and Jack Daniel’s whiskey, Davy Crockett, Aretha Franklin, Kathy Bates, Dolly Parton, and three American Presidents. It is home to the oldest live radio show in existence, the Grand Ole Opry, airing since 1925. The Volunteer State got the nickname for its soldiers’ valor during the War of 1812, particularly at the Battle of New Orleans. Tennessee also furnished more troops for the Confederate Army than any other state and more service members for the Union Army than any other Southern state. As a result, the only monument in America dedicated both to Union and Confederate soldiers is in Greeneville. Tennessee has more trees’ species than anywhere else in America, and its natural beauties also include no less than 3,800 caves.
Once synonymous with husbandry, the state economy nowadays relies on manufacturing, mining, tourism, forestry, agriculture, chemicals, transportation, electric power generation, automotive industry, and the service sector.
These verticals created a $380 billion gross product in 2019, which equals 1.8 percent of the United States’ annual GDP.
Although…
…the state got its name from the Yuchi Indian word meaning ‘the meeting place,’ Tennessee has not been so welcoming gambling throughout history.
Except for a single law in 1905 which prohibited betting on horse races — a long-lasting pastime of Tennesseans — regulations were virtually nonexistent until 1987. That year, the state legalized pari-mutuel wagering, only to repeal it again in 2015, even though residents may bet on races outside Tennessee.
The lottery was not instituted until 2002, while DFS contests were introduced in 2016.
Other than authorized charitable raffles, all other games of chance — bingo, keno, pull-tabs, or slot machines — are banned. Therefore no land-based casino is allowed to operate in the state.
The legislation doesn’t expressly cover online gambling, making iGaming somewhat lawful, albeit in a gray area. On the other hand, interactive onshore operators are strictly prohibited.
Finally, in 2019, The Volunteer State legalized interactive sportsbetting.
The regulated online market launched on November 1, 2020, with up to seven major operators going live with licensed sportsbooks.
Legal Framework
The statutory act authorizing online-only wagering is the Tennessee Sports Gaming Act, allowing bets to be also placed at remote betting kiosks.
The law establishes the Tennessee Education Lottery Corporation (TEL) as the state regulator responsible for the licensing, provisional regulation, disputes resolutions, and controlling standards of the sportsbetting market.
The TEL also employs the Sports Wagering Advisory Council in charge of guiding the operational details of implementation.
The legal age for gambling ranges between 18 for lottery and 21 for online sportsbetting.
Taxes on all sportsbetting activities are set at 20% on aggregate GGR by operators. Bettors have to report their winnings as IRS tax all amounts of $5,000 and more with 24 percent.
All gambling revenues generated through tax appropriations are funneled toward charitable purposes.
Licensing
As of 2020, there are three types of available sportsbetting licenses: A Sports Gaming Operator, a Supplier, and a Vendor for Interactive Sports Gaming.
All applicants undergo a thorough, detailed vetting process to ensure gaming operations’ sustainability and longevity, as described in Chapter 15 — License Rules, Regulations, and Standards — of the Tennessee Sports Gaming Act.
A Sports Gaming Operator License costs $750,000 per year. Applicants seeking to obtain it have to complete a business entity and multijurisdictional personal history disclosure forms and provide any supplemental information required by the TEL. If approved, the license is valid for one year. To be extended, the licensee must pay a nonrefundable $50,000 fee plus the initial annual fee.
A Supplier for Interactive Sports Gaming License — meant for individuals supplying gaming equipment, software, platforms, data, account management systems, payment processors, or any other similar sportsbetting services — cost $10,000 per year, plus optional additional costs for necessary investigations conducted by the TEL. Applicants go through the same disclosure forms process as the SGO licensees. When green-lighted, the license is official for one year. Upon expiration, the licensee has to deposit the initial, nonrefundable annual fee to proceed with operations.
A Vendor for Interactive Sports Gaming License — issued to persons who provide material and ancillary goods or services to conducting sportsbetting activities — cost $500 per year. Individuals seeking registration approval have to complete forms similar to corporate applicants. If accepted by the TEL, a vendor will keep its license for three years, after which period it has to pay a nonrefundable renewal fee again.
All organizations and individuals have to provide several different certificates and insurances as approved licensees. At the same time, they remain liable to periodic audits by the TEL.
Players’ Protection
As expected from a single regulatory framework which took quite some time to see the lights of the day, Tennessee has wide-ranging programs to ensure patrons’ safety.
All licensed operators are obliged to devise an extensive Responsible Gaming Plan which addresses: Self-exclusion, self-limitation, availing responsible gaming information visible on websites and mobile apps, including comprehensive responsible gambling training to employees, procedures to prevent underage gambling, and transparent process to allow patrons to access data about their play.
A specific amendment of sportsbetting law ensures that five percent of all state revenues from interactive operators go to the Tennessee Department of Mental Health and Substance Abuse. The department shall use these funds to provide treatment services for players with problem gambling or gaming disorders, including establishing prevention initiatives.
Advertising and marketing activities can’t target minors and audiences younger than 21 and must provide responsible gambling information. Also, messaging cannot be overly intense or frequent, nor can it create a perception of probable winnings.
Other than that…
…the state runs several public programs and country-wide initiatives such as the Tennessee REDLINE 24/7 helpline, Gamblers Anonymous, and the National Council on Problem Gaming.
The State Department of Mental Health and Substance Abuse also works closely with the University of Memphis Gambling Clinic to provide treatment, prevention, and educational services.
Final Notes
As the newcomer on the post-PASPA gaming scene in America, Tennessee remains focused on safeguarding the sportsbetting market’s integrity by integrating proven operational practices in a piecemeal legalization effort.
Even though we’ll have to wait a little longer to see the outcomes, the foundations seem to be well-thought after, offering a proper mixture of an adequately regulated sportsbetting scene and residents’ proclivities.
As far as online punters are concerned…
…they still have to make proper due diligence to grasp personal liability in The Volunteer State fully since some offshore online casinos continue to accept Tennesseans.
As is the case with any gambling, individual responsibility and prudence are always the best way to combine great fun and good time with chances and choices in games and bets patrons play and place.
With that in mind, we wish you the best of luck!
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