In April 2026, Tennessee saw sports betting activity reach an impressive $480.8 million, marking a 3.7% increase compared to the same month last year—setting a new April record for the state’s wagering program.

The Tennessee Sports Wagering Council reported that operators earned $44.5 million in adjusted gross revenue from the licensed sportsbooks, which contributed $8.9 million in tax revenue to the state, a 4.0% rise year-over-year. These figures reflect the steady growth pattern Tennessee has experienced since the introduction of the privilege tax in mid-2023.

What’s particularly noteworthy is that the increase in tax revenue was driven primarily by the higher volume of wagers placed, rather than fluctuations in operators’ performance. The state consistently earns 1.85% of the total handle, a figure that remains unchanged unless there’s legislative intervention. When considering Tennessee’s typical hold range of 9-10%, that 1.85% equates to approximately a 20% effective tax rate on adjusted gross revenue. This aligns closely with the 15-20% net revenue rates common across various states.

While the basic economics for operators and bettors may appear comparable, there are key distinctions when examining predictability and risk distribution. In states that utilize a net-revenue model, operators shoulder the positive variance (a month with a low hold results in lower taxes), while the state absorbs the negative variance (higher hold months lead to a spike in tax revenue).

Essentially, the state is along for the ride. Conversely, Tennessee’s handle-based structure shifts the entire variance burden onto operators since the tax is fixed in relation to volume.

This means operators may celebrate significant gains during high-hold months but could face setbacks during low-hold months, with state revenue remaining constant at that 1.85% rate regardless.