Tennessee Explodes Out of the Gate With $131 First Month Sports Wagering Handle
- Considering legislative differences, Tennessee’s first sports wagering month impressive
- State’s large 10% hold on operators did not discourage enthusiastic new bettors
- Three new sportsbooks begin operation in 2021 along with new bordering competition
Quite impressive, in that within US betting history, no state has reached such numbers during their initial month. And topping that, the Volunteer State accomplished that feat with only four operators.
Although it is unfair to lay a direct comparison with other states having different legislative rules, it is still a worthy accomplishment, as other US states have struggled simultaneously to reach the $100 million mark following the launch of online sports betting.
As an example, Tennessee overwhelmed Indiana’s opening month record of $35 million set in September 2019. November numbers also show the state’s revenue take was another opening-month record.
By the numbers, figures released last Wednesday from the Tennessee Education Lottery (TEL) showed the state’s four sports betting licensees – BetMGM, DraftKings Sportsbook, FanDuel and local operator Tennessee Action 24/7 combined in wagering handle of $131.4m for November. Betting revenue totaled $13.2m, of which the state’s share came to slightly less than $2.4m.
Funds that are earmarked for infrastructure and education.
Tennessee Education Lottery CEO, Rebecca Paul Hargrove urged some caution and said in a statement that it is still early, and it is difficult to predict what the market could be like soon. Hargrove added in a statement:
November’s figures include adjustments and indicate potential. It is only one month in an unpredictable and extraordinary year, making it difficult to begin extrapolating out from this single month. As this new industry in Tennessee evolves, we will continue to work with licensees and registrants in support of a responsible and competitive sports wagering program.
The Big Hold Did Not Discourage New Bettors
At least for the first month of operation, Tennessee’s substantial state-legislated 10% hold on wagers for operators did not affect the bottom-line toward affecting new bettors. In more established states like Nevada and New Jersey, it is set at a more traditional 6%. In many other US states, legislators have been satisfied with 3% to 5% levels.
Tennessee also has introduced a large 20% tax rate on revenue share, which is likely the discouraging reason why the only reason why only four operators initially launched on the November 1 starting date. It may still be concerning for bettors the 10% hold might still have a tumble effect upon wagering lines as months continue within the state.
Still, the stringent sports wagering rules within Tennessee have not stopped new operators from making plans to enter the market. November’s good news has encouraged their progress and reinforced their decisions.
New Sportsbooks and Competition for Tennessee Coming
These sportsbook operators will also take advantage of another unique Tennessee rule involving their one-time licensing fee of $750,000, among the lowest in the US. The state might have begun a trend among other new states seeking sports wagering legalization. One in that they were the first to recognize the online-only platform, with no brick-and-mortar partner(s) necessary.
Tennessee and its current operators will also capitalize on a somewhat no-competition state border situation for as long as possible. For now, the seven states that border Tennessee do not have legalized “online” sports wagering. Arkansas and Mississippi require a bettor to place wagers within an onsite sportsbook location. This scenario will change sometime in 2021 when Virginia adopts their online wagering model.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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