Tennessee forced to delay sports gambling launch over complaints


Chances of Tennessee sports fans having access to legal sports gambling ahead of next month’s NCAA March Madness just went from long to nonexistent.  The state had approved the activity last year, handing over  the responsibility of coming up with the regulations and implementing the system to the Tennessee Lottery.  The Lottery did as it was expected and handed over the draft rules to the Tennessee Education Lottery Corp. (TELC) for review.  However, everything fell apart after that, and the entire sports gambling launch process has now been put on hold.


The TELC’s Sports Wagering Advisory Council gathered around a table on February 18 to review the initial regulations and feedback that had been presented from the public.  From there, the plan was to have the TELC approve the final language yesterday.  However, Randy McNally, Tennessee’s Lieutenant Governor and Senate Speaker, and House Speaker Cameron Sexton penned a letter to TELC chair Susan Lanigan on February 14, requesting that she put the brakes on the approval process.

At the center of the delay, which could potentially cost the state tens of millions of dollars in lost revenue, are two provisions in the regulations.  One seeks to classify how parlay bets are scored and would allow a tied leg to render the entire bet nullified.  The commission that established the rules didn’t bother following standard  protocol, which, in almost all cases, reduces the overall odds of the parlay bet in the event of a tie, or push, of any single bet in the parlay.

There was also concern over the fact that regulators wanted sportsbooks to keep squirreled away a 15% hold, at a minimum.  This is much higher than what sportsbooks in other states are expected to keep on hand, and could result in the Volunteer State missing out on as much as $11 million in revenue, according to a study conducted by gaming research firm Eilers and Krejcik.

McNally and Sexton had additional concerns, as well.  According to The Tennessee Journal, the legislators believe that the regulations may have crossed out of bounds of the sports gambling law passed last year.  They explain in their letter, “For example, there is concern that the additional categories of licenses created within the rules aren’t within the scope or authority of the Board or Council under the ‘Tennessee Sports Gaming Act.’  Specifically, the Sports Pool Intermediary License and the Vendor License, and associated fees, are not authorized in the Act.”

The TELC has responded to the request and didn’t vote on the regulations when it met yesterday.  Now, it will try to arrange meetings with McNally and Sexton to go over the concerns and figure out a more conducive path to acceptance.  It isn’t clear how quickly changes will be made, but there’s a good chance they won’t happen for at least a couple of months.