What Canada’s Legal Sports Betting Environment Can Teach Us About Tennessee

Posted on July 13, 2020 - Last Updated on April 29, 2020

Outside of a language spoken by many citizens, the nation of Canada and the state of Tennessee don’t have much in common. However, Canadian sports betting might be a crystal ball of sorts for the future of Tennessee sports betting.

There are two elements of the Canadian landscape that the Tennessee market for sports wagering might resemble. Unfortunately, they both represent a net negative experience for both bettors and sportsbook operators in the state.

The first element: Parlays, parlays, and even more parlays

In Canada, single-event wagering remains illegal. There is legislation in the Canadian Parliament to change that on a national level, but for the time being, casinos have only one option for offering bets on sporting events: parlays.

Future sportsbook operators in Tennessee will be able to offer single-event wagering, so that is an important distinction between the two markets. However, one peculiarity of the state’s regulations might motivate operators to act like their Canadian counterparts.

Tennessee is the first — and so far only — US jurisdiction to cap sportsbook operators’ annual payout at 90% of handle. Because of that, the state’s legal sportsbooks will actually try to hold more than 10% to ensure they are in compliance with the rules.

One way they might do that is by offering a lot of parlays and heavily promoting those options. Sportsbooks stand a much better chance to keep bettors’ money in such markets, as opposed to wagers on a single event. That, in turn, ensures their compliance with Tennessee’s regulations.

That isn’t the only concern that Tennessee residents should have about their legal sports betting landscape. Once again, a look at how things work in Canada offers some insight into the possible future in Tennessee.

The second element: Crossing the border to place bets

Because Canada’s legal sportsbooks can’t offer bets on single events, concerns have risen among casino operators about losing handle across the US border. This especially escalated when Michigan legalized sports betting with an online component. When online operators launch there, legal mobile wagering upon single events will be just across the Detroit River, for example.

Canadians crossing the border to Michigan or other US states to bet on their phones isn’t the only concern, however. Although it’s nearly impossible to accurately estimate, Canadians might use illegal betting means to a greater extent than US citizens.

As in the US, Canadians operate illegal bookie services. Offshore betting websites also happily accept wagers from Canadians, just as they currently do from Tennessee’s residents. Despite Tennessee’s pending launch of legal sportsbooks, those might continue to thrive in the state.

Once again, that’s because of the state’s regulations. Operators on the “black market” may continue to offer better odds on single-event wagers and not push parlays as hard. The same could be said of future legal sportsbooks in surrounding states.

One example of this is live bets and prop wagers on college sports. Tennessee law doesn’t allow for such markets, but other states, such as Virginia, do. Bettors could cross over into other states to take advantage of their offerings. Additionally, illegal channels won’t be bashful in taking such bets.

What the legal sports betting landscape in Tennessee will look like is still a mystery in some ways. It may resemble the current Canadian environment in these two facets, and that’s not a good thing if you’re looking to operate a legal sportsbook in the state.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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