Tennessee sportsbooks continued a national trend with their first month-over-month decline in betting volume, a product of February’s 28 days and the conclusion of the NFL season, according to analysts from PlayTenn.com, which offers news and analysis of the fledgling Tennessee gaming market.
The Tennessee Education Lottery announced that bettors placed $176.3m in wagers, the smallest handle since the market’s first month in November, down 16.6% from $211.3m in January. Those wagers produced $13m in adjusted gross income, down 40.4% from the record $21.8m set in January. February’s revenue injected $2.6m in state taxes.
The state’s profitable February was due in large part to the Super Bowl, which produced a win of nearly $3m on more than $15m in wagering.
“Even as quickly as Tennessee has grown, this is a reminder that the state is still very much a part of the same sports betting ecosystem that dictates the rest of the US markets,” said Nicole Russo, analyst for PlayTenn.com.
She added: “Sportsbooks have really done a great job of engaging a sports-crazy population, though. Tennessee’s market has some challenges, but an enthusiastic customer base has a way of overcoming most anything.”
The Volunteer State set a record in November for the highest handle for a market in its first full month of online sports betting, but Michigan broke that record in February with $301.9m. But February’s results still represent an extension of Tennessee’s historic start, pushing the state’s lifetime handle to $699.9m since launching in November, more than any other US market through its first four months.
“Even with increased competition from neighboring Virginia, Tennessee still could close the gap with far more mature markets like Indiana,” said Jessica Welman, analyst for PlayTenn.com. “Considering how quickly bettors have embraced online sports betting, there is plenty of reason to believe that the state’s operators will be able to sustain growth even as their early advantages begin to dissipate.”
The positive news was welcome after the TEL announced last week that the license for Action 24/7, the state’s lone local operator, was suspended amid allegations of money laundering and proxy betting. That left some bettors in limbo, too.
The Tennessee market continues to expand with new operators. And while the TEL does not release results from individual operators, DraftKings, BetMGM, and FanDuel, have fiercely competed for market share since launch. And those leaders were joined in March by William Hill and TwinSpires.
“One of the hallmarks of a maturing market is the addition of innovative upstarts that have the potential to shake up the market, which we are finally seeing in Tennessee,” Welman said. “It’s too early to know for certain if news of a suspended license will shake bettor confidence in the state, and Action 24/7’s suspension is a reminder that regulated sportsbooks need to be vigilant in fostering trust.
“But with the three most established brands in US sports betting thriving, and the addition of smaller, but familiar competitors, Tennessee should be able to learn from this and continue to grow.”