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Sub-national
North America

United States - Tennessee: gambling regulation and licensing

Part of United States

  • Online sports bettingRegulated
  • Daily fantasy sportsRegulated
  • Online casinoProhibited
  • Online pokerProhibited
  • Land-based (reference)Prohibited
  • Prediction marketsGrey market
Regulator
Tennessee Sports Wagering Council
Headline tax
Not yet verified
Licence required
Yes
Last verified
13 Sept 2026

Summary

Tennessee is the only US state to have legalised sports wagering as an online-only market from the start. There are no casinos, commercial or tribal, and the state constitution's lottery exception says in terms that it does not authorise casino games of chance, so online casino and poker are prohibited and there is no land-based partner for an operator to tether to. Licensing is direct from the Sports Wagering Council, an independent body that took over from the Tennessee Education Lottery Corporation on 1 January 2022 and has administered paid fantasy sports as well since July 2023. Nine operators held licences at the accessed date. The cost of entry is a $50,000 application fee and a $750,000 annual licence fee, and the tax is the feature that distinguishes Tennessee from every other regulated state: since 1 July 2023 it is a privilege tax of 1.85% of gross handle, not a percentage of revenue. The regulator's own monthly returns put calendar-2025 gross handle at $5.82 billion and privilege tax assessed at $107.6 million, which is regulator data rather than an estimate. The SWC has become one of the more active state enforcers, fining five offshore sportsbooks $250,000 in July 2025, and the state is now the test case for whether sports event contracts sold by a CFTC-registered exchange are sports wagering. A federal district court blocked enforcement against Kalshi; the Attorney General's appeal is before the Sixth Circuit on an expedited basis.

Common pitfalls

Modelling the tax as a percentage of revenue. Tennessee taxes handle, so a low-hold month still carries the full 1.85%.

Key facts

Regulator
Tennessee Sports Wagering Council (SWC)
Regulator type
Sub-national body
Headline tax
Not yet verified
Licence required
Yes
Minimum age
21+
Tax base
Privilege tax of 1.85% of gross handle, which the SWC defines as gross wagers less adjustments for voided or cancelled wagers and the federal excise tax. It is not a tax on revenue: before 1 July 2023 the rate was 20% of adjusted gross income.

Licensing

Licence required
Yes
Application window
Not yet verified
Local establishment required
Not yet verified
Local server required
Not yet verified
Active licences
9 (as of 13 Sept 2026)
Bank guarantee or bond
The operator application requires a Bond Agreement and a Reserve Account Agreement (SWC operator forms); the amounts are set in the forms and rules rather than published as a headline figure.
Notable licensees
Caesars Sportsbook (American Wagering, Inc.), Bally Bet (Bally's Interactive, LLC), FanDuel Sportsbook (Betfair Interactive US LLC), BetMGM (BetMGM, LLC), DraftKings (Crown TN Gaming LLC), Fanatics Sportsbook (FBG Enterprises Opco, LLC), bet365 (Hillside (Tennessee) LLC), theScore Bet (Penn Sports Interactive, LLC), Hard Rock Bet (Seminole Hard Rock Digital, LLC)
Barriers to entry
No land-based partner exists to tether to, because the state has no casinos; entry is by direct licence. The $750,000 annual fee and the 1.85% tax on handle rather than on revenue are the structural costs.

Licence types

  • Sports Gaming Operator License

    Scope
    Online sports wagering offered directly to Tennessee bettors.
    Term
    One year from issue
    Application fee
    $50,000 as of 13 Sept 2026
    Annual fee
    $750,000 as of 13 Sept 2026
    Fee basis
    Non-refundable $50,000 application fee (Tenn. Code Ann. 4-49-117(b)). Initial licence fee $750,000 for the first year. Renewal is $750,000 for operators with gross wagers of $100 million or more in the prior year and $375,000 below that threshold (SWC Rule 1350-01-.04(1)(b)).
    Renewal terms
    Annual. Fee due within ten days of approval or before the renewal period expires (Rule 1350-01-.05(6)).

  • Sports Gaming Vendor Registration

    Scope
    Suppliers to licensed operators: platform software, geolocation, patron account management, risk management, oddsmaking, data feeds, testing laboratories, KYC, payment processing and revenue-sharing services.
    Term
    Three years
    Fee basis
    First three-year period $150,000 for all vendor types, paid $50,000 on approval and $50,000 on each of the first two anniversaries. Renewal periods are tiered by service: $150,000 (platform, geolocation, account management), $75,000 (risk management, oddsmaking, data), $45,000 (testing laboratories), $30,000 (KYC, payments, revenue-sharing), each spread over three years.
    Renewal terms
    Three-year renewal periods, fees not refunded if withdrawn after submission.

  • Fantasy Sports Operator License

    Scope
    Paid fantasy contests under the Fantasy Sports Act.

Taxation

Headline GGR tax
Not yet verified
Effective date
1 Jul 2023
Turnover tax
1.85%
Tax base
Privilege tax of 1.85% of gross handle, which the SWC defines as gross wagers less adjustments for voided or cancelled wagers and the federal excise tax. It is not a tax on revenue: before 1 July 2023 the rate was 20% of adjusted gross income.

Compliance

Minimum age
21+
KYC requirements
Not yet verified
Stake limits
Not yet verified
Reporting obligations
Licensed operators file monthly returns from which the SWC publishes gross wagers, adjustments, gross handle and privilege tax assessed.

Enforcement

ISP blocking
Not yet verified
DNS blocking
Not yet verified
Payment blocking
Not yet verified
App store takedowns
Not yet verified
Operator liability
The SWC issues cease-and-desist demands and administrative fines to unlicensed operators taking Tennessee bets, and has pursued a prediction-market exchange through the courts.

Notable actions

  • BetAnySports, Bookmaker, JazzSports (Costa Rica), BetOnline (Panama), Everygame (Curacao)15 Jul 2025

    Fined $50,000 each, $250,000 in total, for offering unlicensed sports wagering to Tennesseans.

    Fine: $250,000 as of 15 Jul 2025

  • KalshiEX LLC26 May 2026

    State filed its Sixth Circuit opening brief seeking to reverse a district-court order that blocked enforcement of the Sports Gaming Act against Kalshi's sports event contracts.

Market data

Figures on this record are drawn from official regulator data.

Online GGR
Not yet verified
Reporting year
2025
Licensed operators
9

Timeline

  1. 24 May 2019

    Tennessee Sports Gaming Act signed into law, authorising online-only sports wagering.

  2. 1 Jan 2022

    Sports Wagering Council takes over regulation from the Tennessee Education Lottery Corporation under Public Chapter 593.

  3. 1 Jul 2023

    Privilege tax changes to 1.85% of gross handle under Public Chapter 450; fantasy sports regulation transfers to the SWC under Public Chapter 143.

  4. 15 Jul 2025

    SWC fines five offshore sportsbooks $250,000 in total.

  5. 26 May 2026

    Attorney General files Sixth Circuit opening brief in the Kalshi sports-contracts case.

Outlook

The Sixth Circuit's ruling on Kalshi is the single event to watch, because it will decide whether Tennessee's licence and its 1.85% handle tax apply to prediction-market sports contracts at all, and the outcome will be cited well beyond Tennessee. Separately, the handle tax base means operator margins move with hold rather than with volume, so any push to revisit it would come from the operators; no such bill has been enacted.

Frequently asked questions

Who regulates sports betting in Tennessee?
The Tennessee Sports Wagering Council, an independent state body that took over from the Tennessee Education Lottery Corporation on 1 January 2022. It also regulates paid fantasy sports.
Is online casino legal in Tennessee?
No. The state constitution's lottery exception states that it does not authorise casino games of chance, and Tennessee has no casinos of any kind. Only online sports wagering and fantasy sports are licensed.
What does a Tennessee sports betting licence cost?
A non-refundable $50,000 application fee and a $750,000 licence fee for the first year. Renewal is $750,000 for operators with $100 million or more in gross wagers the prior year, and $375,000 below that.
How is sports betting taxed in Tennessee?
A privilege tax of 1.85% of gross handle, in force since 1 July 2023. Handle is gross wagers less voided or cancelled bets and federal excise tax. It is not a tax on revenue.
How big is the Tennessee market?
The regulator's monthly returns show calendar-2025 gross handle of $5.82 billion and privilege tax assessed of $107.6 million across nine licensed operators. The SWC does not publish operator revenue.

iGT coverage of United States - Tennessee

Cftc sues new york as federal war on state prediction market crackdowns escalates
Prediction Markets

Federal Judge Denies Kalshi Bid to Block New York Gambling Enforcement

A Manhattan federal judge has ruled that Kalshi's federal registration does not shield its sports contracts from New York gambling law, the prediction-market sector's most significant legal setback to date. The decision clears the way for state regulators and the Attorney General to pursue enforcement, and Kalshi has already appealed.

Tennessee Regulators Launch Massive Offensive Against Global Prediction Giants
Prediction Markets

Tennessee Regulators Launch Massive Offensive Against Global Prediction Giants

Tennessee regulators have issued a stern ultimatum to Kalshi and Polymarket demanding an immediate halt to all sports wagering activities within the state. The move follows allegations that these platforms are bypassing local gambling laws by offering unlicensed sports event contracts to residents. Companies have until the end of January to refund all customer deposits or face heavy fines and potential criminal investigation.

Sources

  1. Tennessee Sports Gaming Act & Rules (Tenn. Code Ann. 4-49-101 et seq.; SWC Rules Chapters 1350-01 to 1350-05)

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  2. Sports Wagering Council FAQs

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  3. About the Sports Wagering Council

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  4. Sports Gaming Operator License Fees

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  5. Sports Gaming Vendor Registration and Renewal Fees

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  6. Approved Licensees & Registrants

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  7. Monthly Sports Gaming Reports, January to December 2025 (CSV data files)

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026
  8. Constitution of the State of Tennessee, Article XI, Section 5 (2023 edition)

    Tennessee Secretary of State

    Tier 1Accessed 13 Sept 2026
  9. Attorney General Skrmetti Fights to Protect Tennessee's Authority to Regulate Sports Wagering (Sixth Circuit opening brief, KalshiEX LLC)

    Tennessee Attorney General

    Tier 1Accessed 13 Sept 2026Published 26 May 2026
  10. SWC Issues $250,000 in Fines to 5 Illegal Offshore Sportsbooks

    Tennessee Sports Wagering Council

    Tier 1Accessed 13 Sept 2026Published 15 Jul 2025

Spotted something out of date? Report a correction.

This page is industry reference information and not legal advice.

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