It was a good first week for the Tennessee sports betting apps.
According to the Tennessee Education Lottery, which held a meeting Monday with its Sports Wagering Advisory Council, the handle was about $27 million for the state’s four online/mobile sportsbooks from Nov. 1-8.
The books retained about $3.1 million of that total in the form of winnings. Tennessee charges a 20% tax on a book’s adjusted gross income.
The hold percentage from the first week was 11.4%. Under Tennessee’s regulations, sportsbooks must retain at least 10% of the handle in the form of revenue on an annual basis. Regulators are still considering how to punish a book if for whatever reason it doesn’t adhere to that requirement.
TEL CEO Rebecca Hargrove said Monday that she was “encouraged” by both the betting volume and the number of active users, though regulators didn’t release any numbers of how many people have downloaded a state-sanctioned betting app.
The lottery didn’t produce any documents on the betting data, so it’s not known where the books — DraftKings, FanDuel, BetMGM, and Action247 — rank in terms of their handle or revenue.
The lottery said that the first day of betting — an NFL Sunday — saw $5.1 million in wagers.
How does the market compare to other states?
Let’s assume Tennessee will see about $100 million in total handle during November, based on the data from a quarter month.
A state that is a good comparison here is Indiana. Both the Hoosier State and the Volunteer State have close to 7 million residents.
Indiana kicked off its sports betting industry in September 2019. Retail books were followed by online/mobile apps the following month.
November 2019 was the first full month that Indiana had online/mobile wagering. During that month, the online/mobile sportsbooks in the Hoosier State — FanDuel, DraftKings, and BetRivers — saw $96,205,375 in handle. The total Hoosier State handle was $147,276,915 if including the retail sportsbooks.
It’s not an apples-to-apples comparison, but Tennessee’s performance in November 2020 could roughly resemble Indiana’s in November 2019. Indiana’s mobile books had retail competition, but they also had a ramp-up period before the calendar turned to Nov. 1, 2019.
Tennessee’s market is expected to be larger than Indiana’s at some point. Tennessee sees more tourists and is better positioned regionally, as some of its neighbors aren’t acting to legalize and regulate sports betting. There’s also no gambling competition for the Tennessee sportsbooks from anything besides the state lottery. The Volunteer State isn’t home to any casinos.
Indiana is also expected to consider online casino legislation in 2021. While online casinos would drive more people to downloading and signing up for sports betting apps, it would be another vertical in the equation that wouldn’t help Indiana stay in front of Tennessee.
More sites in the pipeline
Hargrove said Monday that TEL is “currently processing” sports betting applications from Churchill Downs, William Hill, and Wynn Interactive. She said the agency plans to have them “completed by end of the year.”
Based on that timeline, Tennessee should have seven sports betting apps sometime in January.
While Tennessee was slow to get the first apps launched, reaching seven platforms could come relatively quickly. Back to the Indiana comparison: The Hoosier State didn’t have seven apps until seven months after sports betting began.
Indiana currently has 10 active mobile sportsbooks. Tennessee should quickly get to 10 as well, considering there’s no limit on the number of licensees and sports betting companies don’t have to form partnerships with retail casino operators.