You can officially disregard any potential concerns that the state of Tennessee had prior to launching its legal sports betting platform. Not only did the state have the best first two-month stretch in US legal sports betting history, but numbers from January built on their strong start, elevating the platform to new heights.
Despite some controversial plans for their legal sports betting industry, Tennessee bettors in January propelled the state to become just the seventh to generate more than $200 million in sports bets in a single month.
“Tennessee continues to be among the most surprising ascents of any U.S. sports betting market,” said Jessica Welman, analyst for PlayTenn.com. “The records won’t last, as Michigan already proved by snapping Tennessee’s record for a debut month. But the industry is off to a better start in the Volunteer State that anyone could have expected.”
The Controversy of the Tennessee Launch
Tennessee launched the first American mobile-only sports betting platform, which is in itself a bit controversial, on November 1. Tennessee legislators also turned some heads with their decision to allow the Lottery to regulate sports betting – a model that had been a bit of a disaster in jurisdictions prior to Tennessee coming on board.
Perhaps the most head-scratching move was Tennessee’s aggressive 10% hold rate and unusually high 20% tax rate were seen as possible deterrents for top-end providers wanting to make Tennessee a destination. So far, the decisions haven’t discouraged anyone as the Tennessee scene continues its upward trajectory.
Jessica Welman commented last month that: “It seemed operators were slow to get to the state, many were concerned the 10% hold mandate would tamp down demand, and there were questions on whether or not the Tennessee Education Lottery was up to the task of regulating the industry. Those concerns seem like a distant memory now as Tennessee has catapulted itself into becoming a major player in the U.S. industry in just two months.”
Tennessee sports betting got off to a red-hot start and has not slowed down in the least as evidenced by the January numbers released last week.
About Those January Figures
January’s sports betting handle was revealed Tuesday at Tennessee Education Lottery’s monthly meeting and once again, they showed some serious growth for the industry in just their third full month of service.
Tennessee bettors wagered $211 million with Tennessee’s four legal mobile sportsbooks over the 31-day period, making Tennessee the fastest state yet to eclipse the $200 million mark. It was a $30 million spike or 16.6% from December’s already-impressive $180.9 million handle.
The $211 million allowed Tennessee to reach a record-$523 million in bets – more than any state in its first-three months of legal sports betting operation. The previous record for the first-three months belonged to Indiana when their sportsbooks took in $274.2 million in the three months following their launch.
Thanks to Tennessee’s 10% tax rate on the legal betting platform, adjusted gross revenue for January came in at $21.1 million, a 56.8% rise from December’s $13.9 million revenue haul. Off of that, state and local coffers benefitted from a healthy $4.4 million tax bump – a big number considering that New Jersey collected about $9 million in taxes from a nearly $1 billion January handle.
Tennessee’s sports betting market is expected to add a few high-profile sports betting operators the next few months to the four that have so far performed admirably and have allowed the state to set a new standard for states hoping to enter the legal sports betting fold.
WynnBet and William Hill are two such elite providers that have submitted applications and have apparently gotten them approved, paving the way for some more competition in the Tennessee market. Adding sportsbooks will hopefully mitigate the loss of NFL betting that some analysts think made up 60% of Tennessee’s handle last month.
Dustin Gouker, analyst for PlayTenn.com. remains bullish on the Tennessee legal sports betting scene going forward. “It’s early, but it appears that the market has plenty of room for growth, even if more nearby states regulate sports betting themselves,” he said.
Tennessee is the latest example of “If you build it, they will come”. Tennessee took some risks with regard to their legal sports betting launch, but it hasn’t seemed to affect them in any adverse way. Will more hopeful state follow Tennessee’s controversial path? It remains to be seen.