The latest report from the Tennessee Sports Wagering Advisory Council (SWAC) shows Tennessee sports betting is not immune to the summer slumps.
As with other legal jurisdictions around the US, sports betting activity tends to decline in the summer. The primary reason is the limited number of sports between May and August.
However, activity will undoubtedly pick back up once the 2023 college football and NFL seasons begin.
Tennessee sports betting down $48.7 million in June
Recent data from SWAC shows online sportsbooks generated $230.3 million in sports betting handle, down from $279 million in May.
The decline in betting handle resulted in $23.1 million in adjusted gross income (AGI), translating to roughly $5 million in state taxes.
- Gross income: $23.1 million
- Tax revenue: $5 million
- Sports betting handle: $230.3 million
May sports betting numbers:
- Gross income: $37.7 million
- Tax revenue: $7.15 million
- Sports betting handle: $279.8 million
Even neighboring states like Indiana and Ohio have felt the effects of a slow summer. Indiana sportsbooks generated $224.1 million in June, down from the $283 million reported in May.
As for Ohio, sports betting handle in May was $446 million, down 15% from April.
New tax structure underway
Beginning July 1, the 12 online sportsbooks will be subject to a new tax structure.
Currently, operators pay a 20% tax on adjusted gross income. Now, operators will pay a 2% tax on sports betting handle. Although new operators will still have to pay the $750,000 licensing fee, their annual renewal fee could be less depending on how many bets they take.
The initial 10% hold requirement on monthly revenue was established by state lawmakers to ensure tax revenue for the state.
Previously, lawmakers issued a $25,000 fine to sportsbooks that did not secure a 10%, proving difficult for even the top-performing operators like DraftKings and FanDuel.
The change in law does away with the 10% hold requirement and instead places a new 2% total handle tax.