Nearly two months after starting the sportsbook application process, the Tennessee Lottery has yet to receive a single complete request for such licensure. During the TN Lottery Board of Directors’ meeting Tuesday afternoon, reports revealed things are not moving quickly when it comes to licensing.
It seems that while TN residents and visitors love lottery games, the demand for a piece of the state’s sports betting industry is far less urgent. It’s unclear to what extent that may accelerate in the near future.
Currently no completed sportsbooks license applications
Speaking to the other board members Tuesday afternoon, Chair Susan Lanigan provided an update on the status of applications for sports betting licenses. Lanigan said there are three partial operators license applications in.
She also stated that applicants have turned in 12 vendor license requests. The lottery has yet to receive any supplier license applications.
Lottery President and CEO Rebecca Hargrove stated earlier in the meeting that, so far, the lottery has received 110 questions from potential applicants. Lanigan’s comments echoed Hargrove’s report.
“It isn’t that people aren’t interested,” Lanigan said. “It’s just that they are taking their time with the applications.”
Neither Hargrove nor Lanigan shared any details on who has submitted complete or partial applications. Lanigan did share the details of an inquiry, however.
One of the three potential operators who have submitted partial applications inquired about an extension. TN law requires applicants for those licenses to pay $50,000 when they submit their complete application.
If the lottery approves the request, they then have 10 days to pay the remaining $700,000. The applicant was curious whether it could receive more time to pay that balance because of the COVID-19 pandemic.
Lanigan shared that it is not advisable for two reasons. First, the lottery would be expending its own resources to approve license requests and the application fees are somewhat of a “reimbursement.”
Secondly, the inability to produce the remaining fee in the prescribed time might suggest an undesirable financial situation. The lottery only wants licensees who are highly qualified.
The pandemic has raised questions for potential sports betting licensees. It hasn’t slowed the demand for the lottery’s other products, however.
A bumper May for lottery sales in TN
Giving her report, Hargrove said that in terms of sales, May 2020 was the lottery’s best May ever. She stated statewide sales surpassed $1.664 billion.
Hargrove added that the lottery’s revenue for the current fiscal year will surpass the previous year’s. She also commented that it doing so in the midst of a pandemic surprised her.
While the lottery seemed to get a coronavirus boost, the virus certainly dampened sports betting. Estimates suggested a July launch. That seems all but impossible now.
Other forces could be at work though. TN is the first state to approve the activity with no brick-and-mortar component. Additionally, it is the first state to institute a payout cap of 90% for future operators.
Results in other states suggest that the first item shouldn’t be an issue. In states with both online and retail wagering, bettors place the majority of their wagers online anyway.
The second unique facet of the framework might be sufficient to make operators hesitate about TN, however. It could hamper their ability to offer competitive odds and because of that, the profits sportsbooks see.
Crucial time for TN sports betting
If the TN Lottery wants sports betting apps up and running in the state in time for the next college football and NFL seasons, there’s no time like the present. However, there’s a lot to be done yet.
TN law gives the lottery up to 90 days to consider applications. Naturally, the lottery is free to turn those around on a shorter time frame. If it’s still considering requests when August starts, the timing might get very tight.
Each day that passes is one less the lottery has to process applications before football season begins, however. In turn, that’s also one less day future licensees will have to tailor their products to the new market.
Lanigan also shared that in her meetings with the TN Sports Wagering Advisory Council, they have been familiarizing themselves with the esports industry. TN’s sports betting law explicitly authorizes wagering on esports.
Whether that freedom will be sufficient to override concerns that applicants have about the market is uncertain. What’s certain, however, is that parties interested in offering odds in TN don’t seem to be in any hurry.
