Since its first month of operation in November 2020, Tennessee’s sportsbooks announced Wednesday it has registered their lightest volume month in July with less than $145 million. These figures come despite the fact that the NBA Finals and the opening week of the Olympics took place during this period.
Sportsbooks took in $144.6 million in wagers in July, down 17.2% from $174.5 million in June, according to official data released Tuesday by the Tennessee Education Lottery and Sports Wagering Advisory Council. The pace of betting fell to $4.7 million per day over the 31 days in July from $5.8 million per day over the 30 days of June.
According to PlayTenn, Tennessee gaming market tracker, this lowpoint comes in what will likely be the lowest volume month of the year in the U.S., and will “ultimately be short-lived as the football season grows closer”.
Jessica Welman, analyst for the PlayUSA network which includes PlayTenn, spoke about July’s numbers and said: "Even with the NBA Finals and the Olympics this July, there wasn't nearly as much to engage casual bettors as most any other month of the year. But sportsbooks should quickly erase any declines as those casual bettors return home from summer vacations in August and then begin to turn their attention to football."
The dip in betting volume is in line with trends across the U.S. Every major market in the U.S. that has reported July data so far has seen a month-over-month decline in wagering.
Aside from the pandemic-altered numbers produced in 2020, July was the lowest-volume month across the U.S. in both 2018 and 2019 and appears likely to be the low again in 2021.
However, revenue remained high leading to $15.2 million in gross gaming revenue, down a proportional 17.1% from $18.3 million in June. This yielded $13.4 million in taxable revenue, producing $2.6 million in tax revenue.
"All in all, the summer has gone well for Tennessee's sportsbooks. An increased win percentage for sportsbooks has helped make up for the loss of volume. In the slower months that's exactly what operators are hoping to see”, said Nicole Russo, analyst for PlayTenn.com.
The hold percentage has taken even more importance for operators after last week's recommendation by the Rulemaking Committee of the Sports Wagering Advisory Council to increase the fine for operators who do not meet that threshold over the course of a year.
Currently, operators cannot be fined any more than $25,000 per year for failing to meet the 10% minimum hold. The committee wants to make assessments on a quarterly basis, holding operators liable for up to $100,000 in penalties each year for not meeting the 10% threshold.
Tennessee's hold penalty is one-of-a-kind among U.S. markets, and so far this year operators are not on track to meet the requirement.
"It will continue to be difficult for operators to meet that hold requirement, but with a heftier fine, sportsbooks will likely be more engaged in trying to meet the threshold," Russo said. "It was a burdensome requirement already, and the change will make it even more so."