Tennessee launched sports betting in November with just four operators but still managed the best first month in US betting history.
Handle in the first month of legal Tennessee online sports betting hit $131.4 million. Sports betting revenue was $13.2 million, good for 10% hold. That shook out to $2.4 million in taxes to the state.
That’s a great start considering most states with mobile sports betting needed time to ramp up to the $100 million mark. Tennessee also had the advantage of launching in the thick of the NFL season with a Titans team that’s fighting for an AFC South title.
Tennessee Education Lottery CEO Rebecca Paul Hargrove showed a bit of caution when extrapolating what the market could be from its first month:
“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.”
Hot sports betting start all from Tennessee residents?
Tennessee’s quick start is significant for the state, but there was likely some outside help to boost that handle.
The state is the only one in the region with mobile sports betting. Out of Tennessee’s seven border states, just Arkansas and Mississippi have legal sports betting. Both only have retail sportsbooks, though.
Online sports betting in Virginia should launch in January and will be Tennessee’s first true competition for mobile betting.
Tennessee’s results help show how important it is to not only have mobile sports betting but allow mobile registration as well. Sports betting in Illinois is off to an amazing start, though it would have taken much longer to get to where it is if in-person registration was still required.
No operator-specific data for Tennessee sports betting
One downside to Tennessee’s sports betting report is it lacks a bunch of details.
All the report gives is handle, payouts and taxes.
That means we don’t know how Tennessee’s four current operators – BetMGM, DraftKings Sportsbook, FanDuel Sportsbook and Action 24/7 – fared in the market.
There are at least four other sportsbook operators waiting to launch:
- William Hill
Hargrove mentioned at a previous Lottery meeting there might be a special meeting called to get those operators launched before 2021, though it looks like that changed. A special meeting is now scheduled for Jan. 6.
Operators have eight days left before minimum hold starts
Tennessee’s sportsbook operators holding a combined 10% in November is a good start for the state, but might not be enough come 2021.
That’s when the state’s minimum hold requirement of 10% per operator begins.
Operators have been quiet on how they expect to hit that 10% hold, but it might not matter. Right now, it looks like sportsbooks that don’t hold that 10% might only be fined $25,000 at the end of the year.
While most would love to stay on the right side of regulations, a $25,000 fine can be seen as the cost of doing business in order to offer a competitive product in the state.