Tennessee Sports Betting Dips in May Despite Yearly Growth

Tennessee’s legal sports betting market reported a total handle of $437.5 million in May, according to data released by the Tennessee Sports Wagering Council. The figure represents a 5.6% decline from April’s handle of $463.6 million. While the drop may indicate a seasonal slowdown following the conclusion of high-profile sporting events such as the NCAA Men’s Basketball Tournament and the NFL Draft, the market continued to demonstrate robust year-on-year growth. May’s total outpaced the $379.2 million wagered in the same month of 2023 by 15.4%, pointing to a continued expansion in consumer participation and operator activity within the state.

In addition to the reported gross handle, Tennessee operators disclosed $3.2 million in adjustments that were not itemized publicly. When factoring in these adjustments, gross wagers for the month rose to $440.6 million. This adjusted figure shows an even stronger year-over-year increase of 16.2%. These adjustments, though not specified by the council, may include refunds, canceled bets, or other accounting changes typical in sports betting markets. Regardless, they do not appear to significantly alter the monthly trajectory, which reflects ongoing engagement despite the absence of a major national sports calendar in May.

One persistent challenge in evaluating the health of Tennessee’s sports betting sector is the lack of public revenue data. Since July 2023, the Tennessee Sports Wagering Council has suspended the release of monthly operator revenue figures. As a result, analysts and the public have been unable to calculate monthly hold percentages or assess how much of the betting handle is retained as profit by sportsbooks. In the absence of this information, the council’s disclosure of privilege tax revenue serves as the only available financial indicator. In May, the state collected over $8.1 million in taxes from sports betting activity.

Tennessee remains the only U.S. state that applies a flat tax rate on total betting handle rather than on sportsbook revenue. Under current regulations, all licensed sports betting operators are required to pay a 1.85% tax on their monthly handle. This unique model guarantees a consistent revenue stream for the state regardless of operator win rates or bettor outcomes. While this structure can reduce volatility in tax revenue, it has also drawn scrutiny in some quarters for potentially disincentivizing certain business strategies that rely on higher margins.

The Tennessee market is served exclusively through online and mobile platforms, with no physical sportsbooks permitted under state law. Eleven licensed operators were active during May, including major national brands such as FanDuel, DraftKings, BetMGM, Caesars, Fanatics, and ESPN Bet. These are joined by smaller or regionally focused operators like Bally Bet, Hard Rock Bet, Betly, ZenSports, and Tennessee-based Action 24/7. The presence of a wide range of platforms has created a competitive digital environment, giving bettors access to diverse promotions, odds, and user experiences.

 

While May’s handle declined from April, the year-over-year growth highlights the continued strength and resilience of Tennessee’s digital-only sports betting market

 

Conclusion

Although the month-over-month decline may raise questions about market momentum, it aligns with broader national trends in sports betting, where activity typically slows during the spring and early summer months. With major sports leagues such as the NBA and NHL approaching their offseasons and no significant betting events until the start of the NFL and college football seasons in late summer, a temporary dip is not unexpected. However, the double-digit year-on-year growth suggests that Tennessee’s sports betting ecosystem remains healthy and continues to draw new users.

Looking ahead, the return of football in the fall is likely to reignite betting volumes, with operators expected to ramp up promotional efforts and product offerings to capture market share. In the meantime, sustained consumer engagement during lower-traffic months may serve as a measure of market maturity and resilience. Tennessee’s model, while unique in its taxation and reporting structure, appears to be holding steady as a viable example of a state-regulated digital-only betting market.