Sports enthusiasts in Tennessee placed over $460 million in bets during April.
Title: Tennessee's Evolving Sports Betting LandscapeAuthor: Michael Savio | 05/28/2025 03:00
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Tennessee's Unique Sports Betting Market
Sports Betting Taxes are Changing
In July 2023, Tennessee enacted a change to its sports betting tax law. The tax shifted from a 20% tax on gross gaming revenue to a 1.85% tax on gross handle (total bets) for operators [1][2][3]. This model makes Tennessee the only U.S. state imposing a tax on the total amount wagered rather than revenue [3][5]. While this approach ensures predictable tax revenue irrespective of operators' profitability, it may be challenging for operators during low-margin months [3].
Market Performance and 2025 Trends
Despite fluctuations due to seasonal sports event calendars, Tennessee's sports betting market is steadily growing. Wagers jumped from $4.2 billion in 2023 to around $5.2 billion in 2024, marking a 22.8% year-over-year growth [1]. In 2025, this trend continues, with April 2025 seeing $463.6 million in gross handle – a 21.7% increase compared to April 2024's $380.9 million, but a 15.5% decline from the previous month, March 2025's $548.6 million [3][5]. Adjusted gross handle was $466.5 million in April 2025 [3][5].
Tax Revenue
The 1.85% tax on gross handle generated $8.6 million in privilege tax revenue in April 2025 alone [3][5]. This model generates consistent monthly tax revenue that scales with overall betting volume, which has been increasing year-over-year [3].
Tennessee's Regulatory and Market Structure
Tennessee's sports betting market is exclusive to online platforms, with no retail sportsbooks present in the state [1]. The Tennessee Sports Wagering Council regulates the market, overseeing 11 licensed online sportsbooks, including major operators like FanDuel, DraftKings, BetMGM, and Caesars [3][5]. College athlete prop bets are still prohibited under state law [1].
In Summary
Tennessee's sports betting market is booming, with a year-on-year increase of over 20% in monthly handle figures. The state's unique tax model and online-only market support this growth, despite monthly volatility tied to sporting event calendars [1][3][5]. Overall, the trends indicate ongoing expansion of the handle and consistent tax revenue growth throughout 2025.
Online gaming enthusiasts can delve into Michael Savio's insights on how the sports betting market in Las Vegas might be influenced by the unique tax model implemented in Tennessee, as key operators like FanDuel, DraftKings, BetMGM, and Caesars have already established a presence there. With the steady growth of Tennessee's sports betting market, it may not be long before online casinos offer sports betting options, much like Las Vegas has become synonymous with.
As more states explore legalizing sports betting, it will be fascinating to see how the tax schemes in Las Vegas compare with Tennessee's model that taxes operators on the total amount wagered, ensuring predictable tax revenue but presenting challenges during low-margin months. Sports enthusiasts everywhere will be kept on their toes, following the trends in this evolving industry.
