All it took was one Tennessee Titans playoff game for state sportsbooks to hit a new handle record.
Tennessee’s regulator reported $386.1 million in handle for January, topping the old record from October by 2.9%. That new record could have been above $400 million had the top-seeded Titans not lost in their only game this postseason.
Hold was 9.4% on $36.2 million in sports betting revenue, but that is before deductions. Gross adjusted income was $29.1 million, which led to $5.8 million in taxes.
Tennessee sportsbooks see Super Bowl growth
That momentum from January carried into February with TN sportsbooks reporting nearly 50% handle growth on the Super Bowl.
The Sports Wagering Advisory Council reported $23.1 million in handle, up 49.8% from 2021. That led to $3.4 million in revenue and $2.1 million in taxable AGI.
Tennessee’s report pushed this year’s reported Super Bowl betting to $496.5 million, topping last year’s $486.5 million in bets.
Operators already behind on minimum hold
Between January’s report and the Super Bowl statistics, Tennessee’s sportsbooks have taken $409.2 million in bets for $31.2 million in adjusted gross revenue.
That is good for a 7.6% hold based on AGI – which must be 10% for each operator annually, per the state’s regulations.
The SWAC, which took over as sports betting regulator Jan. 1, slightly tweaked the rule to ease the burden on operators. While the 10% hold is still there, sportsbooks can now choose to pay a “true-up” payment.
That means if operators put up the difference in their taxes paid to what they would have paid at 10% they will not be hit with a formal violation. Those kind of violations can affect licensing opportunities in other jurisdictions, operators warned when commenting against the mandatory hold.
Operators only held 7.3% for 2021. That means four sportsbooks including BetMGM, DraftKings and FanDuel could be on the hook for an extra payment. There is an unexpected twist, though: it is not clear who owes what.
Have to keep the books on Tennessee sportsbooks
The SWAC’s tweak to allow a “true-up” payment only works if proper records are kept, of course. As of right now, it is not clear if the Tennessee Education Lottery did that or not.
The numbers in the annual report provided by the former regulator do not match the numbers reported to the SWAC by operators, Executive Director Mary Beth Thomas said at the last SWAC meeting.
Thomas’ staff is working through the numbers to find out where the confusion is. There was no update on the situation as of Thursday, Thomas confirmed to LSR.
