Tennessee sportsbooks closed May 2026 with $443 million in total handle, continuing a downward trend that began after a record-setting March. It was a minor setback for Tennessee sports betting, as the state's licensed operators finished the month with approximately $41 million in adjusted gross revenue at a 9.25% hold rate. As the calendar turns toward summer, regulators and operators alike are watching whether a maturing market can sustain momentum without the lift of major sporting events.
A Handle Tax Model Unlike Any Other in the Country
Tennessee is the only state in the nation that taxes sportsbook operators on total handle rather than adjusted gross revenue. At a rate of 1.85% of gross wagers, the state collected roughly $8.2 million in privilege tax from May's betting activity. That number does not rise or fall with how well or poorly operators perform in any given month; it moves only with the volume of bets placed. The model offers predictability for the state but has drawn scrutiny from the Tennessee Sports Wagering Advisory Council, which has raised concerns about whether handle-derived revenue is keeping pace with funding commitments to lottery scholarship programs. With March handle at $562.6 million, April at $480.8 million, and May at $443 million, the three-month sequential decline has brought that conversation back into focus. Total privilege tax collected across all three months was approximately $27.6 million, a figure regulators are weighing against scholarship fund projections set when the market was growing faster.
Market Maturation and the Months Ahead
Ever since Tennessee legalized sports wagering in November 2020, there have been a plethora of approved Tennessee sports betting apps and it has helped the state grow into one of the more established mobile-only markets in the Southeast. The state operates without retail betting locations, meaning every wager flows through one of the 13 licensed digital platforms available to residents. That number dropped recently when Betly Sportsbook exited the state on June 24, 2026, following a wave of smaller operators nationwide that have found it difficult to compete against deeply capitalized books. Year-over-year handle comparisons for May remain positive, which signals that the market has not contracted in absolute terms. The softness is seasonal. NFL season opens in September, and Tennessee has historically seen handle surge in the fall, when football dominates betting volume across every legal market in the country. How operators position themselves between now and kickoff, particularly around promotions and odds offerings tied to the World Cup currently underway, will shape how quickly the state recovers to March-level numbers.
