All eyes are on Tennessee as its new, one-of-a-kind tax policy took effect beginning in July.
However, the Volunteer State — like every other state — saw less legal sports betting action this month than the month prior as everyone waits for football season to start.
Tennessee’s Sports Wagering Advisory Council (SWAC) announced that the state accepted $215.4 million in bets from its online betting sites for July, a 6.4% decline from the previous month.
However, July’s year-over-year comparison showed a healthy increase in wagers for Tennessee sports betting: July 2023 had a nearly 18% jump in action compared to the same time last year.
A tax on handle, not revenue
July is the first month of the state's new tax plan on sportsbooks; instead of billing operators based their revenue (like all the other legal states), Tennessee is now taxing sportsbooks based on their handle.
Tennessee has always seen the regulations of sports betting as a money maker, and this policy reflects that.
Before this month, sportsbooks were forced to hit at least a 10% hold from the bets they took in or be fined. After 2022 began with several months of sub-10% holds, Tennessee passed this new plan to increase its revenue.
But if July is any indication... lawmakers may regret this change.
July’s tax bill was $4.0 million — 13% lower than June, even though the monthly handle fell just 6.4%, and a whopping 44% decline from two months ago. The July 2023 tax bill is more comparable to July 2022’s bill of $3.6 million... in a month that saw $30 million fewer in bets.
This new change also gives less transparency out of the state — the latest report from the SWAC no longer even showed the revenue that the state's operators pulled in; just the total wagers and tax.
