Tennessee Sports Betting Handle Decreases by 18.8% in February
Tennessee was the latest state to report a decrease in sports betting volume in February. Its $313.3 million in total wagers represented an 18.8% decrease from the state’s all-time record $386.1 million handle in January. Decreases like this have been seen across the country in February, so it wasn’t surprising to see similar results for Tennessee. Tennessee sportsbooks will see better days ahead with the NCAA Tournament defining a massive sport betting month in March.
Handle and Revenue Decrease
Tennessee’s sportsbooks collected $313.3 million in bets placed in February, a massive 77.7% increase year-over-year despite the decline from January’s total. February’s handle was still the lowest for Tennessee since the NFL season began in September. Tennessee sportsbooks reported $20.9 million in revenue in February, a decline of 42.4% from January’s $36.3 million in revenue. Taxes decreased by about 48%, from $5.8 million in January to $3 million in February.
Tennessee sports bettors wagered $23.1 million on the Super Bowl, up from $15 million in 2021, but that wasn’t enough to compensate for the five football weekends in January. Alec Cunningham, a lead analyst for PlayTenn.com, described how the Super Bowl is an “important singular event, but it can’t fully replace a month filled with football games, as there were in January.” Cunningham also stated that March Madness should help the state’s sportsbooks “challenge wagering records again.”
Tennessee’s hold rate remained low in February as sportsbooks reported $15.1 million in adjusted gross revenue after deductions, which is a 4.8% hold rate on the state’s total handle. That hold rate is down from 7.6% in January. For the first two months of 2022, sports betting operators are holding a combined 6.3%.
Tennessee’s Changing Regulations
The Tennessee Education Lottery, previously the governing body of sports betting in the state, instituted a mandatory 10% hold rate that was a significant burden on sportsbooks in the state. When the Sports Wagering Advisory Council took over as the governing body, sportsbooks had a strong push to have this rule overturned. That didn’t happen, but the SWAC changed the rule to allow sportsbooks to pay a “true-up” payment to cover the difference between taxes owed and paid rather than a violation and fine.
With the new regulations in place, tax data is critical for the SWAC to be able to keep track of taxes paid and taxes owed. However, the tax data the SWAC received from the Education Lottery reportedly does not match the data submitted by operators including BetMGM, DraftKings, FanDuel, and Action 24/7. With the discrepancies in data reported, the SWAC has work to do to figure out how much each sportsbook owes in taxes to the state.
Tennessee Sportsbooks Look to the Future
While February wasn’t a terribly exciting month of sports betting results, the upcoming sports schedule leaves sportsbooks with plenty to look forward to. The March Madness tournament makes March one of the most lucrative sports betting months. That will especially be true if the University of Tennessee Volunteers can make a deep tournament run. Operators also will be thrilled to know baseball is returning with a full schedule, meaning there will be plenty of action over the summer.
With the impact of COVID-19 declining and a mostly standard sports calendar in place, Tennessee sports betting operators can look forward to the first typical sports year since 2019.