It was a long, difficult, and difficult road for the legal sports betting industry in Tennessee. But after the first full week of action, it looks as though all of the detractors and all of those that worried about Tennessee’s controversial and head-scratching sports betting policies may have been blowing things out of proportion.
Many looked at Tennessee’s sports betting regulations with concern. Firstly, and perhaps most controversial was their unusually high 10% hold-rate that threatened to limit the number of high-end providers wanting to set up in the state while also potentially detracting from the number of bettors choosing the local betting scene over overseas books. Secondly was their decision to launch a mobile-only platform, without the backing of even one brick-and-mortar facility. And third was their high, 20% tax rate, which ranked second behind only Pennsylvania’s 36%.
But a look at the numbers coming out of Tennessee, the 19th state to welcome legal sports betting, after its first week of operation all-but-erases all of the concerns. Let’s take a peek.
It may have helped the Tennessee legal sports betting scene that they launched on a Sunday, November 1, right before the beloved Titans were about to take the field during one of their most successful seasons in decades.
According to the Tennessee Education Lottery (TEL) Sports Wagering Advisory Council, the four sportsbooks that were live on Day 1 took in just over $27.4 million in total handle during their first full week of operation that started November 1 and ended November 8.
Day 1, which happened to coincide with Sunday NFL action, brought in $5.1 million alone despite just the four providers in operation. Sportsbook revenues from that day exceeded $800,000.
“Our Tennessee launch went incredibly well,” Elisa Richardson, spokeswoman for BetMGM, said in an email the day after the launch. “It was our biggest new player signup day ever.”
How Tennessee Benefits
It took a while, but Tennessee’s state and local coffers are seeing immediate results. In the first week of operation, $2.5 million in revenue for sportsbooks led to $509,000 in taxes generated off of the $27.4 million handle. $349,000 in tax revenue came from Tennessee’s first-day haul.
It was certainly a good first seven days for a sports betting platform that is expected to generate between $23 and $45 million in tax revenues right off the bat off thanks to the 20% tax rate that the state has adopted.
The sports-crazed nature of the Tennessee market is expected to fully support the legal sports betting platform going forward, ultimately generating huge amounts of cash for the cash-strapped state. With its unique online-only platform, it will be interesting to see just how Tennessee stacks up with the other bet-friendly states in the country.
After all, according to the American Gaming Association, mobile betting has been responsible for over 80% of the bets taken in the last year. So, Tennessee’s decision to opt-out of a retail platform could ultimately pay off.
Market About to Start Growing
BetMGM, the two National DFS behemoths, and Nashville-based Action 247 have been responsible so far for the success in Tennessee so far, but those operators will get some company soon.
The Tennessee Lottery is in the process of signing off on approval for three more operators in the state – BetAmerica from Churchill Downs, William Hill, and WynnBET. Hopes for the growing market and the providers in question are that the end of 2020 will see the three providers go live in Tennessee and that competition in the market will increase the platform’s profile in the state.
A Few Kinks
Tennessee’s new sports betting platform will experience some growing pains as they have already. During Sports Wagering Advisory Council Meeting, complaints included providers not getting their advertising materials preapproved and the four providers being slow on their required daily reports. Confusion over the 10% hold rate was also brought up.
But all things considered, Tennessee experienced a successful first week of legal sports betting. Week 2 should be better as should Week 3 and beyond. All eyes will be on the state to see if they can jump onto the Top-5 bet-friendly states in America when their monthly figures are tabulated