Tennessee generated $1 million less in tax revenue from mobile sports betting in September 2023 than during the same period a year prior. The decrease comes despite Tennesseans wagering $83 million more in September 2023 than in September 2022.'
Tennessee also saw a $400,000 decrease in tax revenue in August 2023 compared to August 2022, despite $37 million more being wagered in August 2023 than in August 2022.'
The revenue dips come shortly after the state's mobile sports betting tax structure changed on July 1, shifting from a 20% tax on adjusted gross income to a 1.85% handle tax. The taxation structure was changed because operators were missing the state's controversial 10% hold mandate, willingly accepting a $25,000 financial penalty instead of meeting the hold requirement.'
As a result, the Tennessee legislature looked into ways to better maximize the state's tax revenue from mobile sports wagering. Instead of stronger enforcement of the 10% hold mandate or a minor alteration to the revenue tax, the legislature landed on a first-of-its-kind handle tax.'