Sports betting in Tennessee continues to be the topic of discussion for the state’s Sports Wagering Advisory Council (SWAC) and the busy agenda led to two significant decisions at the most recent meeting.
The first – SWAC will stay out of the battle over the state’s mandatory 10% hold (for now) but thinks lawmakers should give it a second look. And secondly, the council approved Fanatics Sportsbook’s application, so its mobile app will be launching in Tennessee very soon.
Fanatics Sportsbook Cleared to Launch in Tennessee
Fanatics is already the largest E-commerce sports licensing company in the world. It holds agreements with every major American sports league, including but not limited to the NFL, NBA, NHL, MLB, and MLS, as well as collegiate conferences and organizations. And now they’re branching out.
The company recently trademarked the business name “BetFanatics.” The online sports betting app will become part of the Fanatics family, and Tennessee could be ground zero. They realize that the industry is constantly changing and joining the legalized sports betting space is just another way to strengthen its brand.
Tennessee might be the first state to launch BetFanatics, but it won’t be the only one. Fanatics also has at least a provisional license for online gambling in:
There’s also an outstanding application in Pennsylvania.
Tennessee’s “Hold” Decision Pushed to Legislators
In addition to approving Fanatics’ application, SWAC decided not to impose fines on nine out of 11 sportsbooks that failed to meet the 10% hold requirement on legal sports betting revenue.
SWAC Executive Director Mary Beth Thomas has already told lawmakers that the industry is willing to talk about and work on a legislative fix. That led the council to table discussion about potential fines and violations for those nine operators until after the session if the legislature does not make any changes.
Sportsbooks must generate more than 10% of their annual adjusted gross income from wagers in order to comply with Tennessee’s sports wagering laws.
According to PlayTenn, the goal of the rule is to guarantee that Tennessee receives a specific amount of tax revenue depending on the revenue from the sportsbook.
Sports Gambling Taxes, Hold and Handle
They describe “hold” as the difference between handle and payouts in the sports betting industry. Handle is the money that a sportsbook takes in via its customers placing bets. Sportsbooks keep a percentage of money for every dollar wagered, which is the hold.
And to understand why there’s such an interest in getting this right, all you have to do is follow the money. According to SWAC members, wagers on sports in Tennessee totaled $3.8 billion in 2022, including $440 million in December. That amount, which is up 41% from the previous year, is the biggest monthly total ever reported in Tennessee. 20% of privilege taxes are paid to the state, amounting to $68 million in 2022.
Sports gambling taxes are divided (in Tennessee) as follows:
- 80% goes to education.
- 15% to the state for distribution to local governments.
- 5% goes to mental health services.
The ball is now in the legislature’s court.