Tennessee Sports Betting Revenue
Each month, the Tennessee Education Lottery (TEL) releases a report detailing sports betting revenue for the state.
Unlike many other states in the US, Tennessee features an online-only sports betting market. There are no retail casinos or sportsbooks that generate revenue for Tennessee.
Each licensed sportsbook reports the following numbers:
- Handle (The total amount of bets accepted)
- Revenue (The sportsbook’s earnings or the total amount remaining after paying winners)
- Taxes (20% of adjusted gross revenues payable to the state as a privilege tax)
All-time Tennessee sports betting numbers
Total sports betting handle in TN history
Total sports betting revenue in TN history
Total sports betting taxes to date for TN
Tennessee’s first month on the market
Tennessee’s first month of sports betting blew competitors out of the water. Bettors wagered over $131 million from Nov. 1-30, 2020. Prior to that, Indiana held the record for most handle during a launch with $35.2 million in September 2019.
Here’s a look at how other states performed during their first month of legal sports betting:
|State||Launch Date||First Month Handle|
|Delaware||June 2018||$7 million|
|New Jersey||June 2018||$16.4 million|
|Mississippi||August 2018||$6.3 million|
|West Virginia||September 2018||$7.44 million|
|Pennsylvania||November 2018||$1.41 million|
|Rhode Island||November 2018||$682,714|
|Indiana||September 2019||$35.2 million|
Tennessee sports betting hold
The Tennessee Education Lottery requires sportsbooks to hold 10% of annual wagers, In other words, player payouts must not exceed 90% of all wagering activity for the year. According to the new emergency regulations set forth by the Sports Wagering Advisory Council, operators can now opt to pay a compliance fee if they fall short of a 10% annual hold.
By doing so, they can avoid having the infraction appear on their “permanent record,” so to speak.
More info on the details of the hold requirement can be found here.
The industry standard for hold is calculated using the following formula: [revenue]/[handle]. The decimal is then moved two spots to the right to get the hold percentage.
Take November 2020 for example: [$13,224,908]/[$131,444,523] = 0.101 or 10.1%
Historic Tennessee Sports Betting Revenue
- Handle: $131,444,523
- Revenue: $13,224,908
- Tax: $2,363,918
- Handle: $180,900,000
- Revenue: $13,900,000
- Tax: $3,080,000
- Handle: $211,300,000
- Revenue: $20,900,000
- Tax: $4,300,000
- Handle: $176,300,000
- Revenue: $13,000,000
- Tax: $2,600,000
- Handle: $205,900,00
- Revenue: $18,000,000
- Tax: $3,200,000
- Handle: $172,400,000
- Revenue: $15,500,000
- Tax: $2,800,000
- Handle: $160,900,000
- Revenue: $15,400,000
- Tax: $2,700,000
- Handle: $174,500,000
- Revenue: $18,300,000
- Tax: $3,200,000
- Handle: $144,559,000
- Revenue: $15,172,000
- Tax: $2,600,000
- Handle: $144,500,000
- Revenue: $10,100,000
- Tax: $2,000,000
- Handle: $257,300,000
- Revenue: $25,600,000
- Tax: $3,300,000
- Handle: $37,300,000
- Revenue: $23,300,000
- Tax: $3,400,000
- Handle: $365,700,000
- Revenue: $328,800,000
- Tax: $5,900,000
Where does the sports betting tax go?
Tennessee charges sportsbooks a 20% sports betting “privilege tax”. This rate is relatively high compared to fellow jurisdictions. However, tax rates vary drastically across the US when it comes to sports betting. Nevada imposes a 6.75% tax rate, while comparatively, Rhode Island sits at 51%.
Tennessee is already a hot market. In just the first eight days of legalized sports betting, bettors wagered over $27 million, leading to almost $510,000 in tax revenue for the state.
In the first month, over $2 million in taxes came in.
In the first year, Tennessee collected a whopping $35.5 million for the state.
But where does all this tax money go?
The Tennessee Education Lottery’s Lottery for Education account receives 80% of this tax revenue. The account helps fund scholarships and grants for students statewide. Over 15 scholarship programs share these funds.
After this, 15% of the remaining tax revenue goes to local governments for use on roads and other infrastructure projects.
The final 5% goes toward state-funded gambling addiction programs organized by the Tennessee Department of Mental Health and Substance Abuse.
In the first year alone, sports betting generated almost $1.8 million in funding for Tennessee responsible gambling programs.
Tennessee intends to further boost its responsible gambling initiatives as gaming expands.