The Volunteer State of Tennessee has leapt out of the blocks since launching on November 1 2020, and recently became the fastest ever state to reach a total of $1 billion in sports betting handle. Almost unbelievably, that is faster than traditional sports betting powerhouses like Nevada and Pennsylvania, and even more incredibly, even faster than the grand-daddy of online sports betting powerhouses, the Garden State of New Jersey. New Jersey held the previous record, passing $1 billion in handle its seventh full month of operation, while Tennessee broke the barrier in only six full months of operation.
However, both states are watching the rise-and-rise of Michigan, currently on pace to beat them both.
Only eight states in total have achieved more than $100 million in sports wagers during their first six months of operation. New Jersey ($928.1 million) was the only other state to come close to breaking the $1 billion barrier. Indiana ($794.2 million), Colorado ($669.9 million), Iowa ($270.25 million) and Illinois ($201.8 million) are the only other legal online sports betting states to have generated more than $200 million in their first full six months since launch.
The industry has brought in more than $18.3 million in tax revenue for Tennessee in its first six months of operation. Tennessee’s tax rate is 20%, relatively high compared to other legal online sports betting states.
When online sports betting passed into state law in July 2019, Volunteer State lawmakers said they anticipated the industry would potentially yield around $50 million in annual tax revenue. Gaming industry experts have estimated that State Government taxes could draw in as much as $100 million for the Tennessee Education and Higher Education Scholarship system each year once it reaches maturity.
Tennessee has seven fully functional sportsbooks currently online in the state: FanDuel, BetMGM, William Hill, Tennessee Action 24/7, TwinSpires and DraftKings with the latest addition to the sportsbook line-up, WynnBET, the most recent to launch on April 30.
Breaking Down Tennessee’s April Sports Betting Numbers
Pushing the all-time Tennessee sports betting handle through the $1 billion ceiling was the $178 million in sports betting handle for April. That figure was down 13.6% from the $205.9 million of bets generated in March, however a slight lift on the $176.3 million taken in February.
That April 2021 sports betting handle result generated $2.8 million in privilege taxes for the state. The state’s gaming overseer, the Tennessee Education Lottery Corporation (TELC) divides the privilege tax among three separate areas: grants and scholarships for students (80%); local governments infrastructure projects and other programs (15%) and state-funded problem gambling programs (5%).
Also coming in with the April sports betting report was the news that the Volunteer State’s Sports Wagering Advisory Council will take over from the Tennessee Education Lottery Corporation in overseeing the sports betting industry.
“Tennessee has suffered some growing pains, which shouldn’t be a surprise considering how little experience the state had in regulating legal betting,” said Jessica Welman, a leading Tennessee sports betting industry analyst. “Despite the challenges, the foundation is set for what should be a long period of growth. Ideally, the change in oversight will help the market further flourish,” Welman concluded.
Another announcement coming during the April handle call was news that four new sports betting operators have applications pending to launch their online operations in Tennessee.
Nicole Russo, another gaming expert, said the new operators should keep the industry moving forward;
“The Tennessee market is still a long way from maturity. New operators will help keep the market fresh and growing, while the dominant players continue to reach new customers. The bottom line is that Tennessee is nowhere near its ceiling yet,” she said.
We can’t wait to see where sports betting goes from here in the Volunteer State.