Making Sense Of Sports Betting’s Fast Start In Tennessee

As Betting USA reported last week, the Tennessee mobile sports betting industry put up a massive number in its first month. The $131 million wagered in Tennessee in November is the largest first-month tally in legal US sports betting history.

What makes the number even more impressive is Tennessee’s middling population of 6.8 million.

Comparing Tennessee Sports Betting to Other States

It took Indiana (a similarly populated state with 6.7 million residents) three months to post Tennessee-like numbers by way of comparison.

  • September 2019: $35.2 million
  • October 2019: $91.7 million
  • November 2019: $147.3 million

Colorado, a state with a slightly smaller population of 5.7 million, needed four months to approach $130 million.

  • May 2020: $25.6 million
  • June 2020: $38.1 million
  • July 2020: $59.2 million
  • August 2020: $128.6 million

But even compared to much larger states, Tennessee’s numbers are bawdy.

Pennsylvania sports betting apps launched in May 2019, and it took a state with nearly double the population five months to better Tennessee’s inaugural numbers.

  • May 2019: $35.9 million
  • June 2019: $46.3 million
  • July 2019: $59.3 million
  • August 2019: $109 million
  • September 2019: $194.5 million

Illinois had a sharper rise, but even that state needed more time than Tennessee to hit $130 million in wagers. After Gov. J.B. Pritzker lifted the in-person registration requirement on June 4, it would take another two months for Illinois to break $130 million. It should be noted that the sports calendar was bare in June and most of July.

  • June 2020: $8.3 million
  • July 2020: $52.5 million
  • August 2020: $140.1 million

Explaining Tennessee’s Fast Start

How did Tennessee do it? The answer, as I see it, is four-fold.

A Good Time to Launch

The state launched during a hotbed of sports activity. November was a record month for several states, and with the upcoming NBA and NHL seasons providing plenty of futures bets, there was no shortage of events for Tennesseans to bet.

A Well-Structured Launch

The synchronized mobile betting launch in Tennessee was well-covered and long-awaited. Delays had people clamoring for the launch and provided media and the operators an opportunity to spread the word and penetrate the market.

It’s also becoming apparent that synchronized launches are the way to go. Unlike a staggered launch, operators enter the market on equal footing that seems to bring out everyone’s best efforts. The marketing campaigns are competitive and act as a blanket campaign for the sports betting industry, not just individual operators.

A Lack of In-State Competition

Tennessee is a mobile-only sports betting state due to the lack of land-based gambling in the state. Other than the Tennessee Lottery, there isn’t much in the way of competition for people’s gambling dollars.

Couple that with the ongoing pandemic and people spending more time at home, and it’s much easier to explain Tennessee’s monster first month.

A Lack of Out-of-State Competition

Tennessee shares a border with eight states (tied with Missouri for the most shared borders), none of which offer mobile sports betting:

The Tennessee border doesn’t have a huge population center, but it’s safe to say that a significant amount of Tennessee wagers came from non-Tennessee residents.

Prognosticating Tennessee’s Sports Betting Future

The Tennessee sports betting market is predicted to be similar to Indiana or Colorado, so the fast start points to Tennessee reaching market maturity relatively quickly. Instead of a slow buildup, Tennessee was shot out of a cannon but fast approaching its top speed.

And as noted above, none of Tennessee’s neighbors currently offer online sports betting, but that will change. Mobile sports betting in Virginia is expected to launch in January. North Carolina passed a law legalizing retail sports betting. Kentucky, Missouri, and Georgia are sports betting possibilities in 2021. Mississippi and Arkansas offer sports betting, but not remote betting, although there are some discussions in both locales. Even anti-gambling Alabama has been hit by the sports betting bug.

A final problem is the soon to be instated 10% hold mandate. How that will impact the industry is unclear at this point, but it does limit the state’s operators’ ability to appeal to sharp bettors.

Bottom line: Tennessee sports betting is off to a strong start, but it’s unlikely to see the same growth other, slower out of the gate, markets experienced in subsequent months.

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