In a revealing pattern, Tennessee’s sports betting handle experienced a noticeable drop at the start of the year. Despite the seasonal ebb of January, the state has managed to remain in a strong position following its significant milestone achievement back in November 2023, when sports betting handle first exceeded the half-billion-dollar mark.
Comparative data for January reflects a 5.6% decline in gross wagers to $467.4m, a figure which fails to match up to November’s impressive total of $517.1m. This downturn is not altogether surprising; the sports betting industry is often subject to fluctuations relating to the sports calendar and bettor engagement.
Nonetheless, the January figures stood 13.8% higher than those reported in the same period the previous year, suggesting a trajectory of growth for Tennessee’s relatively young legal wagering market, which swung open its doors in November 2020.
Tax revenues, a significant marker of the sector’s financial contributions, present a mixed picture. The privilege tax assessed for January amounted to $8.6m, marking a slight decrease as this is the first instance of tax figures falling below the $9m mark since November 2023. However, historical data on a broader scale showcases Tennessee’s strong performance in this arena. The United States Census Bureau’s Quarterly Survey of State and Local Tax Revenue (QTAX) found Tennessee ranking seventh nationally for tax generated from sports betting in Q3 2023 with $16.1m. This put Tennessee’s share at 3.1% of the hefty $506m pooled nationally.
The landscape of legal sports betting in Tennessee has been dynamic and robust. At inception, heavyweight operators such as FanDuel, DraftKings, and BetMGM were quick to set up shop in the Volunteer State. Since then, the market has continued to burgeon with new entrants and deals that reinforce the industry’s stability and growth.
August 2023, for instance, saw the addition of Fanatics Sportsbook to the Tennessee market, as part of their grand scheme of expansion which includes Ohio, Massachusetts, and Maryland. ESPN Bet also chose Tennessee as a primary state in its 17-state launch in November, tied to Penn’s monumental partnership worth $1.5bn with ESPN, the largest sports media entity in the U.S.
The state’s relationship with sports betting extends beyond the realm of digital platforms, with the physical presence of industry players such as Hard Rock, which launched operations in Tennessee in September 2022. Hard Rock had already ingrained itself into the local community with three of its cafés and the Hard Rock Bristol Casino just over the state line in Virginia.
Another notable collaboration was the partnership between Caesars Sportsbook and the Memphis Grizzlies, a Tennessee-based NBA team, cemented in August 2022. These partnerships showcase a vibrant ecosystem where media, sports franchises, and betting operators coalesce to provide an integrated sports betting experience.
While Tennessee’s sports betting industry has demonstrated its ability to weather the month-on-month volatility with resilience, the strength of operator partnerships and strategic market entries signal enduring prospects. The state is evidently claiming its space in the broader American sports betting narrative, leveraging its tax revenue contributions and growing stable of marquee betting brands. Offering a promising glimpse into the future, Tennessee’s January figures may simply represent the natural undulations of an industry on the rise.
