Tennessee sets state record for amount bet on sports in first month

Online-only sports betting got off to a particularly strong start in the US state of Tennessee as gamblers wagered $131.4m (£95m) throughout the month of November.

This means Tennessee, which went live with online sports betting on 1 November without any requirement for in-person registration, achieved the highest handle of any state’s first month in operation.

By comparison, New Jersey and Indiana recorded handle of $95.6m and $91.6m respectively in their first full month after flicking the switch on regulated sports betting.

If Tennessee’s handle for its first month was applied to October, it would make Tennessee the seventh highest of the 20 states currently with legal sports betting up and running.

Meanwhile, sports betting revenue among Tennessee’s four online and mobile sportsbooks – DraftKings, FanDuel, BetMGM and Action 24/7 – amounted to $13.2m after $118.2m was paid out in winning bets.

This revenue equated to a 10% hold across the board, while the state collected $2.4m in taxes from the quartet.

However, the data didn’t provide a breakdown of how each licensee performed in the Volunteer State, which is home to a population of almost seven million.

Rebecca Paul Hargrove, CEO of the Tennessee Education Lottery (TEL) which licenses and regulates sports betting in the state, said: “Our first month of sports wagering in Tennessee comes at a unique time in the world, let alone the sports world.

“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.”

Tennessee just set the record for the biggest 1st month of betting on sports for any state, with $131M wagered in November pic.twitter.com/z5sNcAaJWM

— Sara Slane (@Sara_Slane) December 23, 2020

Tennessee is quite unique as a regulated sports betting state in that it doesn’t have any land-based casinos or racetracks, which is why the TEL took charge of overseeing sports betting regulation after legislation passed in April 2019.

Lawmakers opted for an open licensing set-up with no limit on the number of licences as opposed to the TEL running a sportsbook itself, although there was criticism that it took more than 18 months for the state to go live.

There is also the peculiar stipulation that sports betting operators have a minimum hold of 10% – a rule that no other state has implemented so far and one that critics say makes it difficult for legal books to compete with unlicensed offshore firms.

For example, a two-way market priced up with a 10% margin would mean odds of -123 (1.81 in decimal odds) on both sides when the industry standard is -110 (1.91).

Sportsbooks must achieve this 10% minimum hold on all handle they take each calendar year or face fines of up to $25,000. This doesn’t affect operators in 2020, but it will come into effect from 2021.

With more brands set to enter this land-locked state, as well as sports betting soon launching in neighbouring Virginia, operators may well ignore the hold requirement and accept a fine as a cost of offering competitive odds.