Sports Betting in Tennessee: Legal Landscape, Platforms, and Tax Information

Legalization and Regulatory Framework

Tennessee legalized sports betting in May 2019 through the Tennessee Sports Gaming Act, making it the first state in the U.S. to allow online-only sports wagering without any brick-and-mortar sportsbooks. The industry officially launched on November 1, 2020. The Tennessee Sports Wagering Council (formerly overseen by the Tennessee Education Lottery Corporation) serves as the regulatory body, ensuring operators adhere to compliance standards.

Unlike other states, Tennessee does not permit retail sportsbooks; all betting activity must occur through licensed mobile and online platforms. This unique framework has allowed the state to quickly adapt to digital trends and accommodate a growing number of bettors.

Legal Requirements for Bettors

To legally bet on sports in Tennessee, individuals must:

Be at least 21 years old
Be physically located within state boundaries when placing a bet
Register an account with a licensed sportsbook

Geolocation technology is used to verify users are within Tennessee state lines before accepting any bets.

Available Sportsbooks in Tennessee

As of 2025, several major online sportsbooks are legally operating in Tennessee. These include:

FanDuel Sportsbook
DraftKings Sportsbook
BetMGM
Caesars Sportsbook
Barstool Sportsbook
Hard Rock Bet
SuperBook
Betly

New operators occasionally enter the market after receiving approval from the Sports Wagering Council, making the state competitive and consumer-friendly.

Types of Sports and Bets Allowed

Tennessee permits betting on a wide range of professional and collegiate sports, including:

NFL, NBA, MLB, NHL
NCAA football and basketball
Golf, tennis, MMA, and auto racing
International sports such as soccer and rugby

Betting markets include point spreads, moneylines, totals (over/under), parlays, teasers, futures, player props, and in-game (live) betting. However, betting on individual college player props is not allowed.

Taxation and Revenue Allocation

Tennessee imposes a 20% tax on sportsbook revenues—one of the highest in the nation. The breakdown of tax revenue distribution is as follows:

80% to the Lottery for Education Account
15% to local governments
5% to mental health and substance abuse services

Bettors should also be aware of potential personal tax liabilities. Gambling winnings are subject to federal income tax and may need to be reported on IRS Form W-2G or via Schedule 1.

Payout Rules and Minimum Hold Requirement

Tennessee is unique in requiring sportsbooks to maintain a 10% hold rate, meaning operators must retain at least 10% of the total amount wagered. This regulation is controversial, as it can lead to less favorable odds compared to other states. Nonetheless, the rule remains in place as of 2025.

Responsible Gambling Measures

All licensed Tennessee sportsbooks are required to provide tools and resources for responsible gambling, including:

Deposit and wager limits
Self-exclusion programs
Links to organizations such as the National Council on Problem Gambling

The state maintains a self-exclusion list that players can voluntarily join to prohibit themselves from accessing betting platforms.

Final Thoughts

Tennessee’s sports betting market stands out due to its online-only model, high tax rate, and regulatory hold requirement. Despite these distinctions, the state has established a robust and rapidly growing market, with billions in handle generated annually. Whether you are a seasoned bettor or a newcomer, Tennessee offers a fully legal, accessible, and mobile-friendly environment for sports wagering.