Tennessee‘s Sports Wagering Council reported $472 million in sports betting handle for March, the third-highest total in Volunteer State history.

Handle was up 20.2% from March 2023, and the state’s top-five monthly handles have all come in the past six months. College basketball took center stage as the Volunteer State had six teams represented in the men’s and women’s NCAA Tournaments. Tennessee reached the regional final on the men’s side, while the Lady Vols and Middle Tennessee advanced to the round of 32 in the women’s bracket.

The $1.32 billion handle for the first three months of 2024 — exclusively from the state’s 11 sports betting apps as Tennessee is an all-digital state — is up 16.4% compared to the same period last year.

The state collected $8.7 million in taxes from its 1.85% levy placed on gross handle. Tennessee is the only state with commercial wagering to collect sports betting taxes based on handle and has generated $24.3 million worth of receipts for the first quarter of 2024. Since the SWC doesn’t collect operator revenue data, it is unknown if taxing handle has proven to provide a more consistent stream of tax revenue for the state.

1 New York $1.85B
2 Maryland $536.7M
3 TENNESSEE ~$472M
4 Iowa $272.4M
5 Oregon $69.4M
6 West Va $52.1M
7 Montana $6.59M
8 TBD
9 TBD
10 TBD#SportsBettingX #GamblingX

— Chris Altruda (@AlTruda73) April 10, 2024

Baaed on the March figures from the states that reported prior to Tennessee, it would appear taxing the handle likely generated more revenue for the state than the previous method of taxing operator adjusted gross sports betting revenue at 20%. A total of six states published reports and combined for an 8.2% hold on $2.8 billion handle for gross revenue in March.

Applying that same win rate to Tennessee’s handle would have resulted in $38.6 million in gross operator winnings. After deducting the 0.25% federal excise tax, the state would have been eligible to impose its 20% levy on $37.4 million in AGR. That would have created $7.5 million worth of receipts, $1.2 million less than it collected via the tax on handle.

Taking data from a larger subset of states’ reports from January and February, Tennessee likely left tax dollars on the table in January, but outperformed the 20% AGR tax in February. Using the national holds on gross revenue — 10.9% for January and 7.8% for February — the handle tax is outperforming the AGR tax by nearly $1.2 million through the first three months of 2024.