Tennessee sports betting can generate $ 6 billion in betting annually once the market reaches maturity, according to analysts at PlayTenn.com. The PlayTenn portal offers analysis of the Tennessee gaming market in the United States.
Up to four betting operators – including FanDuel and DraftKings, the two largest operators in the country, as well as BetMGM and local operator Action 24/7 – will make their official debut in Tennessee this Sunday, 1st. This will make Tennessee the 19th state to have some form of regulated and legal sports betting.
“Tennessee’s gambling industry will be purely a product of the movement to legalize gambling, with a unique regulatory framework and online operators with no ties to any conventional retail casino,” said Jessica Welman, an analyst at PlayTenn.
She added: “The potential for Tennessee is significant, but the state is working with many variables that make it atypical across legal markets.”
The Tennessee market is almost identical in size to that of Indiana, a state that has attracted $ 1.4 billion in betting in 13 months since its launch, becoming the fourth largest market. In October, Hoosier State broke a state record by posting $ 207.5 million in bets in the month.
Tennessee betting market rules
Tennessee’s design varies in a number of ways that can affect the growth of the betting industry. On the one hand, state operators are required to have a 10% retention. No state has ever established such a requirement, and it is a high limit. Historically, Nevada sports betting retention ranges from 5% to 7%.
The 20% state tax rate on revenue is also relatively high, which could limit operators’ interest in the Tennessee market. On the other hand, the initial licensing fee of $ 750,000 is relatively low, which is attractive to operators.
The launch of sports betting will mark the introduction in Tennessee, in addition to lottery games. This is also new and can be a benefit. Online operators will not be tied to retail casinos and need not worry about personal registration.
“It’s too much to say that Tennessee is the” Wild West “of the betting markets, but it is much more open than we’ve seen. DraftKings and FanDuel will have an edge in the beginning, but we expect a highly competitive market that will attract a number of operators,” said Dustin Gouker, an analyst at PlayTenn.com.
To reach $ 6 billion a year, which could generate nearly $ 120 million in tax revenue for the state, Tennessee will have to capitalize on its love for local teams with the practice of sports betting.
Like the Colorado market, launched earlier this year, Tennessee is home to a robust sports culture that includes great college teams, in addition to the NFL, NBA and NHL franchises. Colorado used great local interest to outdo Indiana in October.
“Tennessee has a lot to offer, including hosting teams with a passionate fan base. But only time will tell how legal bets, especially with a retention requirement, will shape the market,” concluded Welman.