Sports-betting operators shouldn’t have to ‘hold’ 10% of wagers | Opinion – Tennessean
- Evan Davis is the managing director of sports betting and gaming for SeventySix Capital Sports Advisory.
In November, Tennessee will join 19 other jurisdictions around the country where betting on sports through legal, regulated channels can occur. But it’s doing so with one hand tied behind its back.
Unlike every other state that’s legalized sports betting, Tennessee has chosen to implement a requirement that sports-betting operators “hold” 10% of the amounts wagered, meaning that these operators are actually being required to achieve a minimum return on bets.
The rationale behind this requirement – which is not required under state law but has nonetheless been implemented by the Tennessee Education Lottery Corporation, which oversees sports betting – is obvious: The state imposes a 20% tax on sportsbook operators’ gross gaming revenues, meaning that if a sportsbook operator doesn’t make money on the bets that it takes, neither does the state (aside from an annual $750,000 licensing fee, that is).
Imagine this restriction in other industries
But there’s a reason why this type of requirement doesn’t exist in other industries, or in any other state with respect to sports-wagering operators. Imagine if grocery stores were forbidden by law from offering milk as a “loss leader” to attract customers, or if a brand-new restaurant couldn’t