The Tennessee sports betting handle for the month of February showed both positive and negative trends. While the $378.2 million wagered indicated a 15.6% increase from February 2023, it also marked a significant decline from the $465.8 million wagered in January and the $495 million bet in December. This decline in betting revenue has persisted for the third consecutive month.
However, there is hope for a rebound in March with the NCAA Basketball Tournament underway, potentially attracting more wagers, especially with the strong performance of the Volunteers, one of the top college basketball teams in the country.
Despite the positive and negative aspects of the betting handle, the Tennessee Sports Wagering Council has lagged behind in releasing detailed information. There are no breakdowns from individual sportsbooks or insights into the distribution between retail and mobile sports betting. The state reported $6.98 million in ‘Privilege Tax’ for February, calculated based on the betting handle.
It’s worth noting that Tennessee employs a different taxation method compared to other states. Instead of taxing sportsbooks on revenue, the state taxes 1.85% of all wagers, making it the only state to do so. While this approach may result in slightly lower tax revenue, it provides a guaranteed profit without being dependent on the sportsbooks’ earnings, potentially setting a precedent for other states.
Furthermore, Tennessee allocates a significant portion of the sports betting revenue to education, with nearly 80% dedicated to this sector. Approximately 15% of the revenue goes to local governments, and the remaining amount supports various mental health programs, highlighting the state’s commitment to social causes.
Another distinguishing feature of Tennessee’s sports betting landscape is its exclusive focus on online betting, with no retail sportsbooks available in the state. Similarly, the state does not permit online casino gambling. Despite these restrictions, Tennessee has successfully attracted major sportsbook operators such as FanDuel, DraftKings, BetMGM, and Caesars, with Fanatics being the latest addition to the market.
