SPORTS BETTING

US – Tennessee sportsbooks enjoy decent December

By Phil - 23 January 2022

Bettors poured more than $340m in bets into Tennessee’s sportsbooks in December, the third highest monthly handle in state history. The month was a fitting end to a year that brought nearly $3bn in wagers and $240m in revenue, establishing Tennessee as the ninth largest state in terms of betting volume in a rapidly expanding US market.

“The playoff push from the Tennessee Titans and the momentum of the Memphis Grizzlies gave sportsbooks a nice boost to make up for a dwindling college football schedule,” said Alec Cunningham, an analyst for PlayTenn.com. “Sportsbooks have pushed the envelope over the last four months, offering an avalanche of incentives and promos to help grow their customer bases. Those efforts have been a success, and should continue to help grow the market once football ends.”

Tennessee’s eight active sportsbooks accepted $341.8m in wagers this December, up 88.9 per cent from $180.9m in December 2020, according to data released Friday by the Tennessee Education Lottery’s Sports Wagering Advisory Council. December 2021 is part of a torrid four-month stretch for sportsbooks, which included a record $375.3m in October and $365.7m in November.

Bettors fared worse on December’s bets than in November, when sportsbooks won a record $36.9m. But gross revenue was still up 77 per cent year over year, to $24.6m from $13.9m in December 2020. Promotions whittled adjusted revenue to $16.5m, which yielded $3.3m in tax revenue.

December marked the end to Tennessee’s first full year of sports betting, concluding with an impressive four-month run that brought $110.4m in gross revenue on $1.3bn in wagers. For all of 2021, sportsbooks in the Volunteer State generated $2.7bn in online wagers, which will presumably place Tennessee ninth among legal sports betting jurisdictions in the US. This gave way to $239.9m in gross revenue and $39.3m in tax revenue

“Tennessee has overall performed well, especially considering it is still a very young market,” said Eric Ramsey, an analyst for the PlayUSA.com Network, which includes PlayTenn.com. “Tennessee will continue to mature over the next year. It would not be a surprise to see it make up ground on more established markets like Colorado and Indiana, which have similar populations but drew significantly more in wagers in 2021.”

Tennessee’s cumulative hold percentage — the revenue sportsbooks keep as a function of handle — will presumably fall below 10 per cent, though official data has not been made public. That means at least some operators will face a small fine for 2021 operations. The Tennessee Sports Wagering Advisory Council continues to review the rule, which is the only one of its kind in the US.

According to the TEL, operators who do not meet the capped payout rule for the year, or the part of the year they were in operation, could be assessed up to a $25,000 fine. But operators can alternatively pay the “true-up” to avoid the assessment of the fine.

“When operators combine for a hold rate that is one of the highest in the US, yet still fall short of the state’s requirement, we begin to see how challenging a threshold this truly is to meet,” Cunningham said. “In addition, the hold requirement appears to have slowed growth somewhat. It’s not ideal, but the upside is that sportsbooks in Tennessee continue to be innovative in growing the market.”