In the Renaissance era, Beyonce told us, “It should cost a billion to look this good.” And Colorado and Tennessee understood the assignment.
Toward the end of 2023, both states eclipsed the $1 billion mark in sports betting revenue, joining the company of nine other states that reached this benchmark.
In addition to Colorado and Tennessee, the “Elite 11” includes New York, Nevada, New Jersey, Illinois, Pennsylvania, Michigan, Arizona, Indiana, and Virginia.
But what does hitting one billion dollars in revenue mean, and how did Colorado and Tennessee meet this milestone? Let’s dive into it.
Revenue vs. Handle
Two important factors that go into measuring a state’s success when it comes to online sports betting are revenue and handle.
The handle is the total amount of money that bettors wager. The revenue is the amount of money that’s left over after all the wagers have been settled. In other words, a state’s revenue remains after all the bettors have been paid their winnings.
Let’s take Colorado’s November numbers, for example.
In November 2023, the Centennial State reported $608.4 million in handle. Its gross revenue from that month was $28.5 million.
Now, let’s get back to Colorado and Tennessee’s record-breaking revenue
Colorado Breaks a Billion
In October last year, Colorado sports betting gross revenue totaled more than $46 million. With that number, the state officially reached the billion-dollar mark in revenue since sports betting became legal.
Why the big boost in October?
In October, America’s major sports leagues were all in action as NFL, NBA, MLB, and NHL all had games during that time. Additionally, college football was in full swing.
Speaking of college football, the resurgence of the University of Colorado’s program could have impacted the state’s handle and revenue. As new head coach Deion Sanders helped lead the Buffaloes back to relevance and a better record than in 2022, the excitement around Colorado football might have driven more bettors to back the Buffs.
Similarly, the reigning NBA champ Denver Nuggets had returned to the hardwood to begin the campaign to defend their title.
Tennessee Tops a Billion
Tennessee sports betting finished 2023 on a good foot. Good ol’ Rocky Top saw its bettors wager more than $493 million in December and more than $500 million in November. As a result, Tennessee was able to eclipse the billion-dollar betting revenue mark before the end of last year.
What could have attracted the Volunteer State bettors to flock to books in droves in the last two months of 2023?
Unlike Colorado, Tennessee didn’t have a defending champion in action. However, bettors in the state did have other exciting teams to back.
The University of Tennessee was a winning ticket for bettors who backed them on the moneyline throughout the season. Regarding the point total (Over/Under), the NFL’s Tennessee Titans had a 6-11 record. Therefore, Under bettors cashed in there, too.
Remember, Tennessee is also home to the NBA’s Memphis Grizzlies and the eight-time national champion Lady Vols.
Having a handful of teams to throw support (and money) behind could have opened doors to more bets, higher handles, and increased revenue numbers.
Where the Revenue Goes
Though Tennessee’s reporting of its gross revenue numbers has been met with criticism, the state is committed to sending 80% of sports wagering taxes to its lottery education fund. And as Colorado rakes in the cash from sports betting revenue, it also spells out how the revenue is divided.
According to the Colorado General Assembly, the state requires that “12 percent of limited gaming revenue be distributed to gaming counties, 10 percent to gaming cities, and 28 percent to the State Historical Fund for preservation of historical sites in gaming cities and statewide.”