Here’s how the popularity of online sports gambling has grown in Tennessee since it became legal in November 2020 to place bets on your personal computer or cellphone: The Las Vegas-based LegalSportsReport.com, which tracks and analyzes sports betting across the U.S., reports Tennesseans have wagered more than $10.6 billion and the state has collected more than $186 million in taxes during that 37-month span through December 2023.

That jibes with figures recently released by the Tennessee Sports Wagering Council, which oversees licensing and regulation of online sports wagering in the state.

“Based on the information we have available to us, we estimate that between 1.5 million to 2 million people wagered in Tennessee in the (past) 12 months,” SWC executive director Mary Beth Thomas told legislators at a Jan. 10 House Finance, Ways and Means budget hearing. “And sports betting activity continues to grow.

“The Council is responsible for regulating both online sports wagering and fantasy sports in Tennessee. At its core, it’s an agency that’s designed to protect the public health, safety and welfare of Tennesseans. This is really a big task, given that we currently have 12 licensed sportsbooks that have taken in $10.5 billion of wagers in Tennessee since legalization (with) 52 registered vendors and 12 licensed fantasy sports operators.”

When online gambling began in 2020, there were just four sportsbook operators – BetMGM, DraftKings, FanDuel and Tennessee-based Action 24/7. That November, they set a U.S. record (since broken) for best first month with $131.4 million in gross wagering.

Seeing a good thing happen in an untested market, the number of sportsbook operators quickly grew to nine. With a few changes in operators over the next year, the list of sportsbook operators grew to a dozen.

Thomas says she expects that number of operators to hold over the next year even as the gross wagering amounts continue to grow.

In fiscal year 2023, the gross handle – the amount of money wagered by bettors – was more than $3.9 billion in Tennessee, a 14% increase over the previous year. For 2024, projections foresee another 10% growth to $4.3 billion in sports betting activity. Because of those numbers, the SWC did not request an increase for its annual budget.

“We are not requesting any additional authority, spending authority or positions for the coming year in that our operating expenses are funded solely through licensure fees and registration fees paid by sports books, their vendors, fantasy operators. It seems like we’re probably going to even out about where we need to be with the $6.25 million spending authority,” Thomas says.

Operators in the state include the original four along with Bally Bet (the newest), Betly Bet, Caesars, ESPN Bet, Fanatics, Hard Rock, Superbook and ZenSports. BetMGM is partnered with both the Nashville Predators and Tennessee Titans, while Caesars Sportsbook and FanDuel are partnered with the Memphis Grizzlies.

DraftKings Sports & Social in downtown Nashville is one of the new online gaming company-branded venues in Tennessee, reflecting the state’s love of legalized sports betting.

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“We hear from our operators that we are an easy state to do business in,” Thomas says. “One of the benefits to sportsbooks that want to operate in Tennessee is that they don’t have to have an agreement with the casino to do business. So that saves them quite a bit of money, to not have that licensing agreement with a casino.

“We also, I think, because of our staff being focused solely on sports betting, it allows us to really – unlike some states that have a Gaming Commission that focuses on land-based and tribal casinos and all of that – we’re focused on one thing. And so, if they need something, we’re able to be on the phone with them that day, and it’s not a lot of red tape.”

Nevada and New Jersey, which for decades were the only states in which gambling was legal, got company in 2018 when it was ruled that each state should decide whether it wanted to permit legal sports gaming. There are now 38 states plus the District of Columbia that have voted to allow sports gambling, with California and Texas being the biggest holdouts.

Since 2018, LegalSportsReport reports, the total handle for those 38 states and D.C. is an astonishing $293 billion, with some $24 billion in gross revenue for the operators. What makes the financials racked up in Tennessee even more noteworthy is that the Volunteer State is one of just two that restrict gambling to online only.

“We and Wyoming (legalized in 2021) are the only states that are online only,” Thomas said when asked if there is an industry standard for tracking growth in betting activity and how Tennessee compared. “Some states have very different tax structures, some have really different rules about wagering markets. It is not comparing apples to apples. You can’t compare it that way.”

Asked about the tax structure and the revenue online gambling brought to the state in fiscal year 2023, Thomas shared those numbers – $82.1 million – and how it was disbursed among state entities. The Tennessee Education Lottery Fund received 80% or $65.7 million while local governments divided 15%, or $12.3 million, and the Department of Mental Health got 5%, or $4.1 million.

“That will not impact our budget. It will just impact the excess that is contributed to the Tennessee Promise. Anything that we don’t use – whether that’s our spending authority or just money that’s not used by our spending authority goes to the Tennessee Promise.”

All those Tennessee numbers are estimated to grow by 10% to $4.3 billion in 2024.

“It’s actually people who are in Tennessee (who are betting), if you capture everyone in Tennessee because if somebody’s in Kentucky before they just legalized it earlier this year, they came across the border to do it,” Thomas notes.

No physical sportsbooks

Nashville is best-known for its Music City brand, but NashVegas is one of the newer monikers you often hear because of all the neon lights and signs that glitter lower Broadway.

No, the new BetMGM Sports Lounge at Bridgestone Arena is not a gambling establishment. But it does provide a welcome environment for those who would like to gamble on their phones.

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But the addition of high-profile bar/restaurants to the downtown campus connected to the sports wagering industry – the BetMGM Sports Lounge at Bridgestone Arena and the DraftKings Sports & Social on Second Avenue, along with the June 2023 opening of Barstool Nashville and the announced sports bar component of the Luke Combs rebranding of the former Wildhorse Saloon – have confused some about whether brick-and-mortar sportsbooks are allowed in Tennessee.

David Smith, director of engagement for the Sports Wagering Council, assures that sports gambling in Tennessee remains online only.

“BetMGM and DraftKings have entered branding agreements related to the sports lounges in Tennessee. Physical sportsbooks and kiosks are not legal in Tennessee,” Smith points out.

“Someone can go for lunch at one of these lounges and place online sports bets on his or her phone with any licensed operator in Tennessee in one of these lounges, just as they can in any other restaurant in Tennessee.

“The lounges cannot geofence out other sports wagering operators and they cannot provide phones, tablets, computers or any other devices to patrons to place a bet.”

Asked whether the arrival of those branded sports lounges might someday lead to brick-and-mortar sportsbooks in Tennessee, Smith says that’s not under the purview of the SWC to decide.

“As for whether brick-and-mortar locations are on the horizon, that can only happen if the Legislature amends the Tennessee Sports Gaming Act,” he says.

But the arrival of the two branded sports lounges in the last four months shows that DraftKings and BetMGM are players on the downtown scene as well as in the sportsbook industry.

In a news release about the impact of DraftKings Sports & Social and accompanying PBR Cowboy Bar, which opened in early October as the first phase of The Cordish Companies’ Nashville Live! project on Second Avenue, principal Reed Cordish called it “incredibly exciting” to be part of the revitalization and reconstruction of the historic entertainment district following the devastating 2020 Christmas Day bombing. The area is starting to show signs of recovery, though much work remains.

“With five levels of new-to-market brands including DraftKings and PBR, two of the most exciting names in sports and entertainment, we are creating a premier dining, entertainment, music and sports experience for downtown,” Cordish states in the news release.

“We couldn’t be more excited to debut DraftKings Sports & Social and PBR Cowboy Bar and welcome guests to Nashville Live! for the first time.”

DraftKings Sports & Social opens at 5 p.m. Wednesday-Friday and 11 a.m. weekends.

The BetMGM Sports Lounge Restaurant & Bar, open 11-11, is located on the second floor of Bridgestone Arena with a modest entrance on the Fifth Avenue side of the facility, right next door to the Predators’ Locker Room retail store.

A joint project between the Predators and Delaware North, the team’s food service and retail partner, BetMGM Sports Lounge opened Jan. 8.

“The BetMGM Sports Lounge marks an exciting collaboration between the Nashville Predators, Delaware North and BetMGM, bringing a fresh and dynamic dining experience to our fans and visitors,” Nashville Predators senior vice president of operations Dave Urso says in a news release. “We’re thrilled to see this innovative project come to life at the intersection of our passionate hockey community and Nashville’s iconic entertainment scene.”

Matt Prevost, BetMGM’s chief revenue officer, calls the project a win-win for all sports and entertainment fans, not just the ardent hockey fan base.

“The debut of the BetMGM Sports Lounge at Bridgestone Arena is part of our mission to deliver an all-encompassing entertainment experience to Tennessee whether they watch the games at home or in person,” Prevost states.

“Our partnership with the Nashville Predators has been an immense success since we launched in Tennessee, and we look forward to expanding this relationship through dynamic moments that benefits the fans.”

Adds Michael Geczi, Delaware North’s general manager at Bridgestone Arena: “The BetMGM Sports Lounge Restaurant & Bar is more than just a place to eat; it’s a destination that fits right in with the vibe of Bridgestone Arena and the vibrant energy of Broadway. We’re thrilled to go beyond game and event days, offering a dining experience that keeps fans feeling that connection to the arena year-round.”