Tennessee recorded its third highest monthly handle in state history in December as bettors placed more than $340m in bets into its sportsbooks.
Lauded by PlayTenn as a “fitting end” to 2021, a year that witnessed nearly $3bn in wagers and $240m in revenue, Tennessee established itself as the ninth latest state in terms of betting volume in North America’s expanding market.
Alec Cunningham, an analyst for PlayTenn, stated: “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.
“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.”
The Volunteer State’s eight active sportsbooks accepted $314.8m in wagers in December, an 88.9 per cent increase from the previous year that recorded $180.9m, according to data released by the Tennessee Education Lottery’s Sports Wagering Advisory Council.
Bettors fared worse on December’s bets than in November, when sportsbooks won a record $36.9m. Moreover, gross revenue was up 77 per cent year-over-year, to $24.6m from $13.9m in December 2020.
December marked the end to Tennessee’s first full year of sports betting, concluding with a four-month run that brought $110.4m in gross revenue on $1.3bn in wagers.
“Tennessee has overall performed well, especially considering it is still a very young market,” added Eric Ramsey, an analyst for the PlayUSA. “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, according to PlayTenn, resulting in some firms facing a small fine for 2021 operations, though official data has not been made public.
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 explained.
“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.”