| Nashville Tennessean
Tennessee’s new sports gambling industry continued to shatter national records in its second month, pulling in $180.9 million in wagers in December.
The state launched a first-of-its-kind, online-only approach to legal sports betting on Nov. 1 with four operators: FanDuel, DraftKings, BetMGM and Action 24/7. In November, Tennessee reported $131.4 million in wagers, far surpassing past records in the United States for first-month bets.
The state reported a combined $5.44 million in revenue from privilege taxes during its two-month debut.
Combined, Tennessee’s industry drew $312.3 million in bets in its first two months — the most of any state’s first 60 days in U.S. sports gambling history — and industry analysts are taking note of its early success.
“It seemed operators were slow to get to the state, many were concerned the 10% hold mandate would tamp down demand, and there were questions on whether or not the Tennessee Education Lottery was up to the task of regulating the industry,” Jessica Welman, managing editor of online sports gambling news and analysis platform PlayTenn.com, said in a statement. “Those concerns seem like a distant memory now as Tennessee has catapulted itself into becoming a major player in the U.S. industry in just two months.”
Tennessee’s early success eclipses Indiana records
Tennessee’s first four sports gambling operators saw a combined $27.1 million in revenue during their first two months in the state — a new standard, according to PlayTenn.com.
The Tennessee sports gambling market is comparable to Indiana’s market in size and region, and both states’ regulations favor an open market. So far, Tennessee has outpaced several previous records held by Indiana for its sports gambling debut in 2019.
Indiana reported $126.9 million in wagers during its first two months, a record at the time that has now been dwarfed by Tennessee’s $312.3 million in wagers.
Indiana also previously held records for the best first and second month, drawing $35.2 million in bets in September 2019 and $91.7 million in bets in October 2019 compared to Tennessee’s $131.4 million and $180.9 million in 2020.
Online-only format proves popular
Sports gambling platforms in the state attributed their early success in part to the ease and popularity of Tennessee’s online-only sports betting format. As it stands, Tennessee is the only state that does not offer gambling in brick-and-mortar casinos.
John Sheeran, director of trading at FanDuel, said the company sees its retail locations as a way to build their brand and interact with consumers. But he doesn’t think the ban on retail gambling in Tennessee has been detrimental to FanDuel’s success in the state, where the company already had a strong following for its daily fantasy sports games.
“From an online versus retail perspective, I think online is 97% of our business anyway,” Sheeran said. “It’s always been that way, and it’s trended that way in Europe and in other territories as well, so that really doesn’t impact us.”
DraftKings and Action 24/7 executives also cited the popularity of local sports teams, including the Tennessee Titans, as a driving factor for bets.
Operators expect the early months of 2021 to spur more growth with the culmination of the NFL season at the Super Bowl on Feb. 7, and college basketball, NBA and NHL seasons ongoing.
Tennessee is attracting more operators as the market grows. The Tennessee Education Lottery approved Kentucky-based Churchill Downs Interactive Gaming LLC as Tennessee’s fifth legal sports betting platform on Jan. 6. The date for its launch has not been released.
The state has no limit for the number of operators it can approve, given each operator meets state criteria.
Tennessee sports gambling’s first two months
- Gross wagers: $131,444,523
- Gross payouts: $118,219,615
- Gross revenue for sportsbook operators: $13,224,908
- Privilege tax revenue: $2,363,918
- Gross wagers: $180,900,000
- Gross payouts: $167,000,000
- Gross revenue for sportsbook operators: $13,900,000
- Privilege tax revenue: $3,080,000
Cassandra Stephenson covers business at The Tennessean, part of the USA Today Network — Tennessee. Reach Cassandra at [email protected] or at (731) 694-7261. Follow Cassandra on Twitter at @CStephenson731.