Despite a change in state regulators that oversee legal online betting, sports wagering in Tennessee continues to set eye-opening records.
A monthly high $386 million gross handle was reported for January on Wednesday by the Sports Wagering Advisory Council, raising to more than $3.4 billion the gross amount wagered since online gaming became legal in Tennessee on Nov. 1, 2020.
Not only that, but a gross handle of $23,111,449 was wagered in Tennessee for last weekend’s Super Bowl LVI in Los Angeles where the Rams beat the Bengals 23-20, with gross payouts of $19,669,687.
In the 15-month span through Jan. 31, Tennessee has reaped more $50 million in taxes.
“Clearly, Tennesseans are enjoying online sports wagering,” said Mary Beth Thomas, executive director of SWAC, which on Jan. 1 replaced the Tennessee Education Lottery as the state’s regulatory board.
The January numbers topped the previous high by more than $11 million. In October 2021, more than $375 million was wagered in Tennessee. And Tennesseans won about $7 million more than they did for Super Bowl LV in Tampa when they collected $12.6 million of their bets.
Thomas said the hectic transition of state regulators likely won’t be noticed by the countless sports fans who place wagers.
“I do not believe that sports fans will notice any immediate difference in the platforms offered by current operators. Most of the changes that the SWAC made to the rules during the transition relate to the back-office functions of operators, reporting requirements and the licensure process, none of which really impact the player’s experience,” Thomas said.
“However, there are several potential operators who have applied for licensure that will be reviewed by the council soon – so there may be several new platforms available to Tennessee sports wagering players in the near future.”
Currently the state has licensed nine operators, who pay an annual fee of $750,000.
The original sportsbooks to operate in Tennessee were BetMGM, FanDuel and DraftKings, along with Nashville start-up Action 24/7. Four more sportsbooks were added in 2021 — Caesars, TwinSpires, WynnBet and Barstool — while Nashville-based Wagr became the newest operator in January.
“Wagr’s CEO and co-founder/chief product officer Mario Malavé (CEO) and Eliana Eskinazi (chief product officer) both moved to Nashville (from Boston) in the recent past — perhaps a year ago — and are operating Wagr with Nashville as its home base,” Thomas said.
Thomas said the role of SWAC is “ensuring the integrity of sports wagering in Tennessee,” noting her group is a state agency as opposed to the same “quasi-governmental” category of the lottery.”
She pointed out SWAC will operate like any other state agency — from “obtaining legislative budget approval to being subject to a performance audit by the Comptroller from, ensuring that privilege taxes are paid in accordance with state law to adhering to the rulemaking provisions of the Uniform Administrative Procedures Act, following procurement processes and laws, and generally serving as an open resource to Tennessee citizens for sports wagering,” she noted.
“Fortunately, the council members bring a wide variety of business, legal and law enforcement experience to their roles, and they are very active and engaged in their duties. I think that they have always held this level of interest, but now they have the authority and responsibility to carry out their collective vision for regulating the industry in the most efficient and business friendly manner, while ensuring that Tennessee’s public interest and consumer protection goals are met.”
Thomas shared a few goals for SWAC under her leadership.
“Operationally, we have been building our staff and developing our regulatory program so that we are able to provide appropriate oversight to the sports wagering industry while maintaining a healthy environment in which operators can thrive and consumers can engage in responsible gaming.
“I think that my biggest focus right now is making sure that we have enough staff and the right processes in place to be able to (1) review and assess licensure files in a timely manner; (2) engage in thorough compliance monitoring and investigations; (3) develop best practices for responsible gaming oversight; and (4) stay ahead of the learning curve with what is coming down the road for sports betting in the ever-changing areas of technology, integrity monitoring and types of wagers and sporting events that operators would like to offer. I think we are on track to accomplish these goals.”
Thomas helped launch the popular fantasy sports gaming program in Tennessee, which helped her prepare for her current duties overseeing online sports gambling.
“Fantasy sports was really the precursor to online sports wagering. Several of the same operators who offer daily fantasy sports contests also offer online sports betting in Tennessee,” she said. “While the method of play is different, many of the same regulatory requirements exist in both spaces — identity and age verification, operator requirements for the protection of player funds and reserves, and integrity issues involving sporting events, to name a few.
“When daily fantasy sports became legal in 2016, the Secretary of State’s office was given a very short time to promulgate rules and begin accepting license applications. I worked with Secretary (Tre) Hargett to write the rules and develop the regulatory program in order to meet the statutory deadline. I was then responsible for overseeing the program for the first year of its existence – and seven fantasy sports operators were licensed during that time. My experience with fantasy sports gave me the foundation to know how to get the SWAC up and running in (very) short order.
“Having a working knowledge of the industry was helpful — and I had also developed relationships with regulators in other states who were building out their own fantasy sports programs. Many of those regulators are now overseeing sports betting in their states and I have been able to reconnect with them in my new role. It has been professionally fulfilling to see it all come around full-circle.”
Thomas said the most recent figures for January and Super Bowl LVI show the future of gambling in Tennessee has a huge upside.
“I think that the growth really depends on the platforms and offerings developed by the sports wagering operators and the subsequent interest and engagement of Tennessee players,” Thomas said.
“We have a really fabulous staff that continues to grow and that we are all really enjoying what we are doing here.”
Tennessee Sports Wagering Advisory Council
Mary Beth Thomas, executive director
Keith Boring, deputy director
Stephanie Maxwell, general counsel
John Valliant Jr.
2022 Super Bowl wagering in Tennessee
Gross handle: $23,111,449
Gross payouts: $19,669,687
By the numbers:
January’s record gambling
Gross Handle: $386,059,756
Gross Payouts: $349,810,303
Adjusted Gross Income: $29,087,518
Privilege Tax Collected: $5,817,504
$3.4 billion bet in Tennessee
Nov. 1, 2020-Jan. 31, 2022
Gross Handle: $3,428,804,279
Gross Payouts: $3,125,609,918
Adjusted Gross Income: $29,087,518
Privilege Tax Collected: $50,561,422
Sources: Sports Wagering Advisory Council, LegalSportsReprt.com