Tennessee Has Third-Best Sports Betting Handle Ever in January

Tennessee sports betting apps shrugged off a trimmed-down January NFL schedule and recorded their third-best month ever by total betting handle.

According to the Tennessee Sports Wagering Council January report, sports wagering activity in the Volunteer State experienced a month-over-month dip from December but a double-digit spike year-over-year.

The NFL obviously dominated Tennessee's best sports betting sites in January, but the overall Tennessee sports betting scene was also buoyed by the Tennessee football team prevailing in the Citrus Bowl on Jan. 1 and good runs by the Tennessee and Memphis men's basketball teams.

Tennessee records 3rd-best handle ever in January

Sports bettors in Tennessee spent $465.8 million at the state's best sportsbooks in January, the third-best monthly total ever for Tennessee's mobile-only sportsbook scene through just over three-and-a-half years of legalization.

Only November’s $517 million and December’s $493.3 million were better overall sports betting months for the Volunteer State. Those figures are even more impressive when considering the high volume of Tennessee sportsbook promos during NFL season.

January's sports betting activity represented a 5.6% drop from December's $493.3 million, when the NFL schedule was in full swing. It is, however, a respectable 13.4% spike from the $410.8 million in accepted wagers from January 2023.

Nearly $9 million in taxes from Tennessee sportsbooks

Tennessee is one of the few U.S. states that has stopped reporting gross sports betting revenues for its providers on a monthly basis. The Tennessee Sports Wagering Council has also stopped reporting on winnings by sportsbooks.

It leaves the taxes paid by Tennessee's best sports betting apps the only other real measurable that we can compare month-to-month. Tennessee regulators have made that a somewhat confusing and convoluted process along the way.

In July, Tennessee switched from a traditional tax structure wherein a percentage of gross gaming revenue is paid out in taxes. The Council changed to a somewhat head-scratching format in which 1.85% of the state's gross handle is paid out for the state's Lottery for Education Fund (80%), a general fund of local governments (15%), and the Department of Mental Health (5%). 

In the case of January’s legal sports betting haul, nearly $8.6 million in privilege tax contributions were made by Tennessee mobile sports wagering providers.

Tax contributions were down in the Volunteer State month-over-month because of the slight dip in handle, as $9.5 million in taxes came from November's record handle haul and $9.1 million was collected last month off the state's $495 million sports betting handle.

With January’s numbers factored in, Tennessee became just the fifth state to generate over $200 million in tax contributions from its legal sports betting platform. Only New York, Pennsylvania, New Jersey, and Illinois have managed to hit that milestone mark.

Debate in the state over taxes

There is much debate over whether the new system generates more tax revenue for Tennessee coffers. Unfortunately for local residents, the general consensus is that the state's new system has left a lot of tax revenue on the table since its switch in July.

Simple math shows that the old system of taxation would have been much more lucrative for the tax programs that benefit from a robust legal sports betting scene in Tennessee. 

Theoretically, with just a 9% hold rate on Tennessee's January handle - which is a couple percentage points below the average of the eight jurisdictions that have reported their January sports betting figures - taxes paid would have been in the $42-$43 million range.

That number is significantly better than the $8.6 million paid out by Tennessee sports betting apps in January.