Tennessee Kicks Off Legal Sports Betting With a Bang
The entire US legal sports betting industry is posting record handles on a monthly basis. More and more diehard sports fans are taking the plunge by wagering cold hard cash on the same games they love to watch.
The month of December is setting up to be the biggest handle of them all. The NFL season is winding down in anticipation of the next run to a Super Bowl title. Both college football and basketball are still on the board. The recent start of the new NBA regular season should give the books a big boost heading into 2021.
New Jersey has grown to become the biggest sports betting market in the US with close to $1 billion in total sports wagers the previous month. Nevada slides to second but it is still putting up some impressive numbers as well. You can also add Pennsylvania to the list as another very strong market for legal sports betting.
The newest legal market in the country did quite well for itself in its first month of business. Sports betting in Tennessee launched on Nov. 1 and the state’s Education Lottery announced that the handle for the month topped $131.4 million.
For this effort, the Volunteer State has earned the distinction of having the largest sports betting handle ever in a state’s first month of operation. Tennessee Education Lottery spokesperson Rebecca Paul Hargrove clarified the situation as follows:
“November’s figures include adjustments and indicate potential. It is only one month in an unpredictable and extraordinary year, making it difficult to begin extrapolating out from this single month. As this new industry in Tennessee evolves, we will continue to work with licensees and registrants in support of a responsible and competitive sports wagering program.”
What makes the legal Tennessee sports betting industry so unique is the lack of any land-based casinos or racetracks. All sports betting takes place online through mobile sportsbook apps. The state’s four licensed operators launched their apps simultaneously on Nov. 1.
This list includes DraftKings, FanDuel, and BetMGM as the three biggest US sportsbooks. The fourth operator is Tennessee-based Action24/7 in another unique twist. A few more providers are still going through the application and licensing process.
Prior to Tennessee’s launch, Colorado launched legal sports betting this past May. That has already grown into one of the top markets in the country.
Tennessee gaming figures released by the state lottery did not breakdown the betting handle by individual operator. However, state regulations require a minimum hold percentage of 10 percent. This is the difference between the money paid out on winning bets and the amount collected on losing wagers plus commission.
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The total sports betting revenue for the initial month was $13.2 million. This would equate to a 10.1 percent hold based on the total handle.
Tennessee sportsbooks pay a 20 percent tax on revenue back to the state lottery. The tax revenue for November was close to $2.4 million.
Operators are subject to state fines if the monthly hold is lower than 10 percent. This has raised some concerns with the overall competitiveness of state’s sports betting industry. Books in most other states have a monthly hold between five and eight percent.