Tennessee sportsbooks report 7% uptick in handle in June
Revenue jumps 61% in final month before introduction of 1.85% tax on handle
Tennessee sports betting handle grew by 7% year on year (YOY) during June, the final month before the state switches to taxing operator handle over revenue, the latest state data has revealed.
According to a report from the Tennessee Sports Wagering Council, handle reached $230.3m in June, surpassing the $215.7m reported during the same month in 2022.
Volunteer State operators reported a 61% YOY increase in revenue during June, when revenue hit $25.5m, a substantial increase on the $15.8m accrued in June 2022.
The state collected $4.6m in sports betting taxes during June. The month marked the final time sportsbook operators will be taxed on their gross gambling revenue (GGR) at a rate of 20%.
From July, sportsbook operators will transition to a taxation model where they will be taxed at 1.85% of handle generated, rather than on their respective GGR not needed, with Tennessee the first US state to implement the change.
The change was greenlit in May, following a five-month journey through both chambers of the Tennessee legislature.
Other states have mooted switching to taxing handle , including West Virginia, Kentucky, and Minnesota, but in each case legislation never made it through the legislative process.
Also coming into force in July is the removal of a requirement for Tennessee operators to maintain a 10% hold on all wagers or face punitive measures.
The removal comes after criticism of operators manipulating the law to pay reduced fines. According to local estimates, nine of Tennessee’s 11 sportsbook operators have paid the state just $25,000 for falling short of these minimum hold requirements.
In addition, licensees are now prohibited from deducting payouts to bettors, or promotional wagers or payouts from total gross wagers.
Operators in the state are also free to use unofficial and potentially cheaper data sources, following the removal of a requirement to use official data only when compiling sportsbook markets.
Other changes coming into force in July in Tennessee include ensuring sportsbook vendors register for licenses every three years, rather than annually, as is current, with a total fee payable of $150,000.
In respect of operators, license renewal fees are tiered based on the gross handle taken by the respective operator in the previous year. Operators racking up more than $100m in handle would be required to pay renewal fees of $750,000, reducing to $375,000 for those operators taking less than $100m.