Sports betting in Tennessee reported the lowest revenue of its first four months in February as handle dipped a bit from January.
Total handle was $176.3 million for February, down 16.6% from the $216.3 million reported in January. Sports betting revenue was just $13 million in February, though, for a 7.4% hold. That shook out to $2.6 million in taxes for the month.
For most states, that hold wouldn’t be considered a bad thing. It’s right around the national average of 7.2% for publicly reporting states since the end of PASPA in May 2018. TN sports betting, however, requires operators to hold 10% annually.
Through February, operators reported $34.8 million in revenue on $387.6 million in handle for a 9% hold.
The state’s gotten off to a hot start despite just a handful of operators active. Tennessee’s total handle is just shy of $700 million since its Nov. 1 launch, which means it should break the $1 billion mark in March or April thanks to March Madness betting.
Penalty for missing TN sports betting hold requirement not severe
Sportsbooks might still be figuring out the best way to deal with keeping 10% in Tennessee since no other US sports betting jurisdiction has a hold requirement.
It could also be that the penalty just isn’t worth the effort.
According to the state’s sports betting rules,:
“The aggregate annual payout of each Licensee shall not exceed 90%.”
But according to HB 1, the enabling legislation that legalized sports betting, any violation by a licensee can be fined a maximum $25,000.
Since the hold requirement is calculated on an annual basis and not a monthly basis, sportsbooks might just look at that $25,000 as another cost of doing business in the state.
Any additional Tennessee sports betting details?
Nope. The Tennessee Education Lottery releases one of the least-detailed sports betting reports out of any states that report publicly. Only New York is worse: the regulator there doesn’t even report handle.
The only other fact known about Tennessee’s results from February is Super Bowl handle and revenue provided by the TEL last month. Sportsbooks took $15.4 million in bets and reported $2.8 million in revenue for an 8.2% hold.
Who is live in TN right now?
Tennessee still only had four sportsbooks operating in February:
- Action 24/7
- DraftKings Sportsbook
- FanDuel Sportsbook
William Hill became the state’s fifth operator when it launched earlier this month, but the state dropped back down to just four operators shortly after that.
That’s because Action 24/7 had its license indefinitely suspended for multiple instances of suspected fraud and money laundering. The board determined the license should be suspended until the payday loan company turned sportsbook shows it has the proper internal controls to prevent repeat issues.
That hasn’t stopped the company from marketing, though, as an email offering a chance at a free bet was sent Tuesday night despite its suspension. Action 24/7 sued for a temporary injunction to get its license reinstated and was heard in court earlier this week. A decision has not yet been made.