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VOL. 46 | NO. 6 | Friday, February 11, 2022

Sportsbooks pick a winner in Tennessee

We’ve bet $3B-plus in 14 months with Super Bowl boost looming

By Tom Wood

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With Super Bowl LVI fast approaching, you might be surprised by the number of friends and co-workers who are talking about bets they’ve placed via one of Tennessee’s nine legal online sportsbooks.

Don’t be. Sports betting – legalized in Tennessee 15 months ago – has blossomed into a multibillion-dollar industry and generated almost $50 million in tax revenue during that span. And the Super Bowl is the industry’s biggest day.

Beyond the thrill of potential winnings, many say, online sports gambling makes the game more exciting and fun to watch. The question is, how to go about it?

“It’s a fun experience (and) a great hobby when you don’t take it seriously,” says Alec Cunningham, the Knoxville-based managing editor and writer for PlayTenn.com, whose parent company is Malta-based Catena Media. “It’s like going to the movies or doing anything else fun – especially if you’re doing those with friends or colleagues or if you’re building that community around it.”

PlayTenn.com is one of several online publications that covers Tennessee’s immensely popular legal sports wagering industry, which launched Nov. 1, 2020.

Jeff Edelstein, who writes for TNBets – part of the Denmark-based Better Collective Media Group, with an office in Nashville – says online gambling in Tennessee “has definitely been a success story, for sure, in the sports betting world. I appreciate states that do it right, and Tennessee is definitely … one of the states that, more or less, did it right. They allowed competition in and the heavy hand of government wasn’t terribly heavy overall.”

In a 14-month span from that 2020 launch date through the last reporting period, December 2021, more than $3 billion – yes, billion – has been wagered inside Tennessee’s borders, the U.S. Betting Revenue Tracker at LegalSportsReport.com reports.

The website states sportsbooks paid out a combined $2.7 billion to Tennessee players, and the operators divvied almost $267 million in revenue. The state, it adds, reaped more than $44.7 million in taxes (20% of gross revenue) with a 10% hold on all wagers.

“Clearly, Tennesseans are enjoying online sports wagering,” says Mary Beth Thomas, executive director of the Sports Wagering Advisory Council (SWAC).

SWAC is a state agency that, beginning Jan. 1, took over the role as regulator from the “quasi-governmental” Tennessee Education Lottery.

“While I can’t predict the winner, I can tell you that there will be no shortage of types of wagers that can be made on the outcome of the game, as well as and actions and events taking place during the game. … I have no doubt that there will be a lot of action that day.”

There’s no bigger day of the year for operators and players than Super Bowl Sunday. The 2021 matchup, which saw the Buccaneers beat the Chiefs 31-9 in Tampa, was the first on which Tennesseans have been able to legally bet without leaving the state.

“Last year, during the Super Bowl, we only had four sportsbooks live (in Tennessee),” Cunningham notes. “For the Super Bowl alone, there were 15.5 million wagers placed. Apparently, most of those people wagered correctly and placed their faith with the Buccaneers, so they ended up pocketing $12.6 million in winnings.

“For all of February 2021, wagers amounted to $176.3 million. This past December, they’re already at $340 million. So, judging by that and the forward momentum we’re seeing, it wouldn’t be unexpected to see double the wagers at this year’s Super Bowl.”

Here’s a deeper look at how to place your bets, the Tennessee-based operators and issues surrounding online sports betting.

Betting in Tennessee 101

There are no casinos in the Volunteer State, so all gambling is online. And while you don’t have to be a state resident, all bets must be placed inside Tennessee. Here’s the skinny on how it works:

Each of the nine licensed operators (a license costs $750,000 annually) has an app to download on your mobile device. Once registered with that company – and you can register with any or all – open an account, make a deposit, find a bet you like and place the wager. Each operator monitors all bets and pays winnings into its registered accounts.

That’s the easy part. Where it gets difficult is not only how to bet, but on what to bet. The NBC affiliate in Los Angeles recently posted a good explainer of the easiest – and strangest – bets out there.

The simplest is a straight-up wager on who wins or loses. If you correctly pick the Rams to win, you’re having steak for dinner instead of hamburger.

With point spreads (the Rams were a 4-point favorite earlier this week), say you pick the Bengals, four points are added or subtracted to the final score. So, if the Rams win the game 20-17, for example, you still win.

Another traditional bet is the over/under line, or combined points scored by both teams. That total was 48.5 points earlier this week. Pick over and the final score is 25-24, you win; 25-23 and you lose.

But gambling today – as SWAC executive Thomas notes — has evolved far beyond those – from parlays that links two or more bets, which boosts odds and payoffs, to prop bets on the game and everything else. Both of those are offered before and during the game.

Prop bet examples might include who will score the game’s first touchdown, will Bengals QB Joe Burrow throw a TD pass to Oak Ridge product Tee Higgins, or will Brentwood Academy product Jalen Ramsey have an interception for the Rams. One also can bet on who’ll be the MVP or total passing yards.

Wacky prop bets range from who will win the coin toss to which player will be shown during the national anthem to whether Peyton Manning will bowl a strike in a beer commercial, and on and on. It should be noted that Tennessee does not allow prop bets based on pure chance like the coin toss. Otherwise, anything goes.

Longtime Knoxville sports writer Chuck Cavalaris, now part of the weekly show Sports Source on WATE-TV, urges novice gamblers “to be very careful about this online activity.

“One reason there’s so much money wagered and wagered legally online in Tennessee is all these in-games bets – and even in-game parlays,” he says.

Adds Edelstein: “The sportsbooks are not shy about putting anything and everything under the sun. There’s just so many different prop bets that they offer, and they’re just going to offer more and more as the week wears on.

“They’ll start like doing cross-sport stuff – will the Rams score more points than (NBA star) Steph Curry? They’ll start, like, throwing everything against the wall here. And the prop bet market? It’s obviously the most lucrative day in the sports betting world.”

Action 24/7 still fights Goliaths

In 2020, Nashville’s Action 24/7 was licensed as one of the first four operators in Tennessee along with BetMGM, FanDuel and DraftKings. In 2021, four more sportsbooks were added – Caesars, TwinSpires, WynnBet and Barstool. In January, Wagr joined the lineup for a total of nine.

Tina Hodges, president of Action 24/7, says her startup company continues to grow and hopes this year’s Super Bowl tops 2021’s action, which she calls “probably our single-largest game up to that point. We have just been growing month over month over month since then. I’m anticipating the Super Bowl to be, again, our largest event we do.”

Hodges says her fledgling company has and “probably always will be” a David vs. Goliath business attitude.

“Our biggest competitors are publicly traded and international, and they’re blowing out, you know, the price of one Super Bowl TV commercial. It’s just crazy, the amount of money that they’re spending,” she says. ‘But we’re trying to run a profitable business.

“I don’t think there’s any startups that go into their first year thinking they’re going to be profitable. So that I’m very, very pleased with our first-year results.”

She says Action 24/7 has continued to register clients, and that one of the differences between her company and others is their partnership with Advance Financial lending company founded by her husband, Mike.

“Our deposits continue to grow,” she says. “We have so many people enjoying our cash deposit and cash withdrawals. We’re the only (company) in the state offering that, and people absolutely love it,” adding her company also takes a grassroots marketing approach by making their presence known at sports events, restaurants and bars.

Cunningham says she’s “been rooting for Action 24/7 from the very beginning. They’ve got a kind of unique aspect that they’re doing. They’re sponsoring more local events, like here in Knoxville at the Cotton Eyed Joe, they’ve got boxing and UFC fighting events.

“They’re right there, supporting all the fighters, and they’ve got their name on the ring. They’re hitting the ground and trying to spread the word and build that community. So I love the local books. More power to them, you know. It’s hard fighting with the Goliaths but they’re doing great.”

Wagr is the new book in town

The newest Tennessee startup company has its roots in Boston and has come up with a unique social betting game plan that has drawn the attention of Forbes magazine and other publications that cover gaming.

Wagr, co-founded and owned by Harvard graduates Mario Malavé (CEO) and Eliana Eskinazi (chief product officer), opened shop in Nashville last year and launched operations Jan. 20.

Malavae recently announced completion of a $12 million Series A funding round. Investors include NFL Patriots owner Robert Kraft’s Kraft Group, Pear Ventures, the fund of Reddit owner Alexis Ohanian, and Harris Blitzer Sports and Entertainment, which owns the NBA’s 76ers and the NHL’s Devils.

“Although sports betting is undoubtedly one of the largest consumer markets to open up in recent U.S. history, we’re still in the very early innings of product development,” Malavé says. “There are many fans who love sports, but for various reasons find current betting products complex, intimidating or, in some cases, even predatory. We built Wagr to give them a better experience, one that engages them in a more personal way and connects them with the sports communities around them.”

Edelstein describes Wagr as “the first American sportsbook that operates like this. It’s considered peer-to-peer betting. And it’s something that does exist in some European countries, and it’s also similar to exchange betting – which also exists in other European countries and will be coming to America as well. Some companies are trying to get that started.

“And I guess … what Wagr is hoping for – is to create more of a social atmosphere around betting. I’m sure they’re hoping that groups will form on Facebook or something like that and basically be paying for the privilege to use the service and to match up with friends you can bet with from your office, things like that. I guess that to me would be like the main goal of the company.”

Edelstein explains how Wagr works.

“Let’s say I want to see if there’s someone out there who wants the Bengal and six points. So maybe I’ll put a wager out there and say, ‘hey, you know, I’m giving six points.’ And then somebody has a chance to accept or decline the wager,” he says.

“The trick of the wager is that they take 5% off the top. So, it’s a little tricky for a business model, right? Because why would any bettor want to pay 5% off the top?”

Cunningham thinks it will be a hit with modern-day bettors.

“Having something like Wagr integrate the two, you know, we’ve already seen social media do so well,” she notes. “So social media with sports betting? It seems like a no-brainer to me and I’m excited to see how it continues to evolve like that.”

‘Chucky C-Note’ touts trends

Cavalaris, who hosts the “Chucky C-Note Casino” segment on Knoxville’s 90-minute Sports Source TV show, studies trends and statistics to come up with his feature.

“I am not a professional gambler, but I play one on TV,” he is quick to point out. “A lot of times what I do is set the ‘Chucky C-Note Casino’ line for a University of Tennessee sporting event – usually a football game.

“Our panel of local media experts and former Tennessee players then make wagers based on either my point spread – which a lot of times it’s different from the Vegas line – and my total for over and under.

“I’ve kind of dabbled in this for years and years. I grew up here and I’m an avid golfer. And I think that’s one of the reasons I always liked golf so much is because gambling was always a part of it.”

Here are a few Super Bowl stats and trends he’s compiled.

“There’s some interesting trends there. It’s like we went forever and a team did not host a Super Bowl in their home stadium until Tampa Bay did last year. And, of course, Tampa Bay won. This year, the Rams as the NFC champion will be the visiting team,” Cavalaris notes.

“We heard the stats last week or so about Joe Burrow was 9-0 calling the coin toss in the regular season, and he was 0-2 in on playoff game.”

“One thing that I look at is – some of these trends are just odd things you pick up on – but the AFC is actually the home team in the Super Bowl, so they got to pick which color jersey they wear. And it kind of surprised me that they chose black as the home team.

“In one trend – and you could just say it’s a fluke if you want to – but the Super Bowl team in the white jersey has won 14 of the past 17 Super Bowls. And the team with the worst regular-season record is 13-2 in the past 16 Super Bowls.

“One year, I think it might have been the Patriots and Eagles, they were both 13-3 so that’s why it’s 13-2 over the past 16.”

Taking a cue from those old Ronco commercials – “But wait, here’s more.”

“This past season, the Rams were 12-5, and the Bengals were 10-7, so you might think maybe that leans the Bengals’ way,” he says. “It’s also – the trend for the favorites – is 36-19 overall but in the last 10 Super Bowls, the underdog has won seven of them outright. So that makes you think you want to take the points.

“I grew up a Dallas Cowboys fan, and the Super Bowl was always played in January.

“Since they went to February games, the AFC champion is 12-7. And in the last nine Super Bowls, the NFC is only 3-6. So, there’s just all kinds of things that that you look at and you really just hope that people will only wager when they can afford to lose or have fun with.

“I actually think that the key thing to look at will be the Rams have just an awesome defensive line. And, of course, Titans fans will remember the Titans sacked Joe Burrow nine times and somehow Cincinnati still won that game.

“So, that was actually one of two walk-off wins (for) Cincinnati in the postseason. But when you look at the Rams defensive front against the Cincinnati offensive line. I can see why L.A. – last I saw – was a 4-point favorite. So that that’s just pretty much what I’ve been looking at.”

Gambling addictions increase

Those trends and stats are part of the allure of online gambling, but there’s also a dark side.

Mary Linden Salter, executive director of Tennessee Association of Alcohol, Drug & other Addiction Services, says she expects calls to the 24-hour Tennessee Redline (800 889-9789) to increase in the Super Bowl’s aftermath.

“We will not see a spike not on the game day, per say, but in the week or two following,” Salter says.

“What we’re seeing is something that the administration plans to deal with in part. They have some legislation proposed that would make it a finable offense for selling any kind of sports betting to a minor. We definitely want to help curb that.

“We ask people their age when they call us, but I’ve been surprised at how many more calls were actually from juveniles. We don’t really ask them (their age) specifically, just whether they are adults or juveniles.

“We’ve gotten more and more calls along that line and – not that it’s a huge trend – the number of calls we get is still less than 100 per month. But it continues to trend upward is the issue.”

SWAC executive Thomas says part of the new regulatory groups mission “is to ensure that operators are adhering to the Sports Gaming Act and our Rules, which are designed to protect the integrity of sports wagering, protect the public interest, prevent fraud and underage access, and to promote responsible gambling.

“I think that as long as we are fair, accessible and transparent regulators who act with a sense of urgency when addressing the needs of the industry, there will naturally be healthy growth in the industry,” Thomas adds. “I also know that our operators are extremely vigilant in their efforts to watch for unusual or suspicious activity on their platforms.”

From Bungles to Bengals

ESPN recently reported that Houston furniture business owner Jim “Mattress Mack” McIngvale crossed the border into Louisiana, where he has a mobile betting account with Caesars Sportsbook, to place a whopping $4.5 million on the underdog Bengals to beat the Rams.

If he’s right, McIngvale will collect $7.7 million.

Is that enough to sway you?

The head says the Rams. They have a homefield advantage, a superior defensive line and they’ve got a savvy quarterback in Matthew Stafford. If anybody deserves a Super Bowl ring after all those cruddy years in Detroit, it might be him.

But the heart says the Bengals. They shouldn’t have beaten the Titans, but they did. They shouldn’t have beaten the Chiefs, but they did.

And they have Burrow, who will make history if he achieves what many have dubbed as football’s “Triple Crown” – winning the Heisman Trophy, NCAA championship (both at LSU) and the NFL’s Vince Lombardi Trophy. If there’s anyone currently playing who might someday replace Tom Brady as the GOAT (Greatest of All Time), it may be Burrow.

For entertainment purposes only – I’d take the Bengals and the points if I was a betting man. Shoot, I’d take them straight up, winning 24-21.

Two years removed from a 2-14 record, Cincinnati looks like a team of destiny to me.

So good luck with your Super Bowl bets.

“It’s going to be interesting but just pick the team that you think has the best chance to win the game and sit back and enjoy,” Cavalaris says.

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