Online Gambling License in Tennessee
The Tennessee Sports Wagering Advisory Council (SWAC) is a regulatory body tasked with overseeing online sports betting and daily fantasy sports in the Volunteer State. It was established by the General Assembly through Public Chapter 593, which became law on May 27, 2021, going into effect on January 1, 2022. The state’s gambling watchdog has nine members appointed by the Governor, Lieutenant Governor, and Speaker of the House.
When it comes to the duties of the SWAC, they include licensing online sports betting and daily fantasy sports operators, as well as vendors. In addition to that, the regulatory body makes sure that operators comply with the Tennessee Sports Gaming Act and other related rules. It also reviews and approves advertising materials and, when necessary, conducts investigations regarding potential violations of the legislation.
Types of Gambling Regulated by the Tennessee Sports Wagering Advisory Council
The Tennessee Sports Wagering Advisory Council specifically regulates online sports betting and daily fantasy sports. They do not oversee other types of gambling, such as casinos or lotteries, which are managed by different regulatory bodies in the state.
Sports Betting
The Sports Gambling Act was passed by the state legislature in 2019. Governor Bill Lee pointed out that wagering on sports “wasn’t consistent with the values of Tennessee” and didn’t put his signature on the bill. Nevertheless, he allowed the bill to become law, making Tennessee the first US state with an online-only sports betting piece of legislation.
Some of the bill’s provisions were regarded as unfriendly towards both players and operators. First, they imposed a 10% minimum hold on the operators, meaning all sportsbooks in the state were allowed to keep 10% of their total handle. The percentage was relatively high compared to some other jurisdictions. For example, in Las Vegas, the hold ranges from 5% to 6%. As a result, operators in Tennessee were basically forced to offer less competitive odds.
This changed in 2023 when a new model was introduced. Unfortunately, it was still unfriendly towards operators. The 20% gross revenue tax was replaced by a handle tax of 1.85%. Tennessee is the only US state that uses this model.
Its main downside is the impact it has on the operator’s profit margin, forcing them to offer tweaked odds. Luckily, it seems this didn’t have a dire effect on the state’s sports betting market. As of 2024, sports betting fans in Tennessee can choose from 11 apps from some of the biggest operators in the business, such as DraftKings, FanDuel, Caesars, and BetMGM.
Daily Fantasy Sports
Tennessee was among the first states to legalize daily fantasy sports (DFS). It was also the first US state whose legislators overturned the opinion of the Attorney General.
This happened in April 2016, after Attorney General Herbert Slatery expressed his opinion that organizing DFS within the Voluntary States was considered illegal. However, following the overwhelming support for the DFS bill in the House and the Senate, Governor Haslam signed it into law the very same month.
Under the new bill, DFS operators are required to pay a $50,000 licensing fee plus a 6% revenue tax. Residents in Tennessee can take part in DFS contests at all major sites, including FanDuel and DraftKings.
The Tennessee Sports Wagering Advisory Council Regulatory Framework
The Tennessee Sports Wagering Advisory Council operates under the legal framework established by the Tennessee Sports Gaming Act. This piece of legislation is codified in Title 4, Chapter 51, Part 3 of the state’s Code, outlining the standards and responsibilities of the regulatory body.
As we mentioned, the SWAC has a wide range of responsibilities, from licensing and registering online sports betting and DFS operators to ensuring compliance through monitoring and enforcing the existing regulation. Its ultimate goal is to keep gaming practices in Tennessee fair and transparent. Additionally, the council establishes mechanisms of internal control and resolves potential disputes.
The members of the SWAC are appointed from three grand divisions of the state.
The state’s regulatory framework ensures consumer protection and responsible gaming practices. It also helps the SWAC maintain the integrity of sports betting and DFS in Tennessee.
FAQs About Sports Wagering in Tennessee
In Tennessee, online sports betting is only legal with state-licensed operators. Bets with unlicensed online sportsbooks, physical sportsbooks, kiosks, or bookies are illegal. A limited exception allows individual-organized sports pools under $1,000 with entry fees of $25 or less.
Bettors must be at least 21 years old.
No, that’s illegal. This is called proxy betting, and it’s against the law for anyone who isn’t allowed to bet to have someone else place a bet for them, even if they have permission.
No, it’s illegal to bet on high school sports.
Yes. You can confidentially contact the Tennessee REDLINE at 1-800-889-9789 for a referral for addiction services. Bettors or concerned family or friends can also contact the national hotline 1-800-GAMBLER.
