Sports wagering operators in Tennessee were able to post small monthly gains for May thanks to cracking the 10% hold plateau for the fourth time since launch in 2020.
The Sports Wagering Advisory Council (SWAC) reported handle totaling close to $261.6 million for the month, a 10.7% drop compared to the $292.8 million wagered in April. But an increase of 1.25 percentage points in the gross revenue win rate to 10.4% meant the state’s nine operators claimed more than $27.3 million for the month — nearly $175,000 above April’s haul.
It was the third-highest hold in 19 months of wagering in the Volunteer State, and the first time it reached double figures since a 10.1% hold was posted last November. Tennessee requires individual operators to maintain a 10% hold — a challenging threshold considering the industry standard is 7%. Otherwise, they are required to make a payment making up the difference.
Operators reported almost $3.5 million in promotional credits and other deductions, leaving more than $23.8 million available for the state to tax. The 20% rate on adjusted revenue meant an inflow of $4.8 million into the state coffers, raising the total to more than $22.8 million for the first five months of 2022. That is nearly $7.2 million ahead of last year’s pace.
Top-line numbers showing year-over-year growth
All-time Top 10 #SportsBetting handles post-PASPA by state (May in CAPS):
1 NEW JERSEY $27.93B
2 Nevada $24.09B
3 PENNSYLVANIA $14.81B
4 Illinois $12.26B
5 INDIANA $8.09B
6 NEW YORK ~$7.9B
7 Colorado $6.95B
8 MICHIGAN $6.28B
9 Virginia $4.98B
10 TENNESSEE $4.67B <—NEW— Chris Altruda (@AlTruda73) June 28, 2022
The SWAC does not offer much in the way of statistical financial breakdowns — it does not provide handle and revenue figures by either operator or sport. At the same time, the year-over-year numbers in the exclusively digital landscape show plenty of growth.
Handle has surged 75.2% to more than $1.6 billion in 2022, fueled by a record $386 million wagered in January as Tennessee has enjoyed a run of nine consecutive months with handle of at least one quarter of a billion dollars. Gross revenue is up 67.1% to nearly $138.2 million, with the 8.5% win rate slightly off the 8.9% from the first five months of 2021.
The adjusted revenue of $114 million is a 46.1% increase compared to last year, though the win rate spread is far more pronounced at 1.4 points. The AGR win rate this year is barely over the industry standard of 7%, while it was 8.4% through five months last year. Promotional play and deductions have increased by nearly six-fold this year to more than $24 million to this point.
Despite that additional promotional spend, Tennessee is one of only eight states to surpass $60 million in state tax receipts since launch in the post-PASPA era, and it also cleared $400 million in all-time gross operator revenue. May’s numbers also pushed the overall national total of taxes collected from sports wagering in the post-PASPA era to more than $1.5 billion, with more than two-thirds of that total coming since the start of 2021.
May #SportsBetting numbers, national note: Year-by-year national state taxes collected in post-PASPA era with the amount surpassing $1.5 billion.
2018: $37,797,161
2019: $125,914,064
2020: $244,796,997
2021: $562,278,829
2022 (YTD): $529,677,218#GamblingTwitter— Chris Altruda (@AlTruda73) June 28, 2022
