University of Tennessee

What’s Making Online Betting Big Business in Tennessee? Your Questions Answered

May 25, 2021

Tennessee opened legal online sports gambling in November of 2020 with record-setting action. According to news site, “Tennessee’s sportsbooks enjoyed the best debut in the history of U.S. legal sports betting, generating more in wagers in the market’s first month than any other state in history.” Subsequent months have seen this burgeoning activity continue. What’s to be made of this massive influx of interest – and money – into Tennessee’s online betting business?

Jonathan Hasford, a marketing professor in the University of Tennessee, Knoxville’s Haslam College of Business, recently addressed some of the promotional components driving Tennessee’s legalized online betting boom:

Tennessee’s online sports gambling business is flourishing. From a marketing standpoint, what do you see as contributing to this record-setting betting pace?

Hasford: Several factors could enter into this. Tennessee is a big sports state with UT athletics, the Tennessee Titans, the Memphis Grizzlies and the Nashville Predators all having enthusiastic fan bases, and betting is one way for fans to feel closer to their teams. Also, online gambling in the state became legal on November 1, 2020, when the country was deep in the grip of COVID-19. Online betting is a way to get a jolt of excitement without the risk of venturing outside.

Additionally, the mere opportunity to gamble is going to be appealing. Once something is first legalized, it draws in a large audience. Some may even participate that have never gambled before just to try it out.

The sportsbooks operating in Tennessee are offering generous promotions, with risk-free first bets, enormous potential payouts and more. What is the strategy here in marketing terms?

Hasford: There is an important first-mover strategy at play. With any type of commodity product, establishing loyalty is key. Basically, all sportsbooks function the same way. So, if people sign up for one initially, it is likely they will continue using it since there are few advantages to switching to another company.

You can’t drive down a street or turn on a TV in Knoxville without seeing Jamie Foxx or some other celebrity hyping online betting apps. What does this advertising barrage mean?

Hasford: This is another classic marketing strategy trying to capitalize on source attraction. Jamie Foxx, or any other celebrity, is generally well-liked and people tend to follow these recommendations, particularly with new and/or unfamiliar products. His mere presence and favorable consumer attitudes towards him makes people think they should sign up for the sportsbook he is promoting.

To what extent do you think online betting will be of interest to millennials?

Hasford: I think it may draw some interest from and millennials, but sports gambling is a leisure activity that requires some disposable income. I largely think the audience for sports betting is older men who are more established within their careers and who spend a lot of money attending sporting events, buying sports memorabilia, etc.

Four sportsbooks – FanDuel, DraftKings, BetMGM and Action 24/7 – opened Tennessee’s first month of betting. Three more have since joined, but only Action 24/7 sportsbook is local. Does being headquartered in Tennessee give it any advantage in the competition for customers going forward?

Hasford: From an online perspective, no. Every sportsbook has a relatively similar interface on their website. However, I think the next step is live venues. People want to experience sports socially, and betting in person will also be preferred for groups and older people who are less tech savvy.

For example, sportsbooks in Nevada have a special area where servers come around to you. You can have your own booth and your own TV, and you can watch horse races or basketball or whatever, and your bets can be placed right there, and they will come pick them up from you.

If the goal is to expand into a live venue, a business headquartered in Tennessee should have advantages, given its locality and prior experience with state and local governments.

Note: This article is not an endorsement of gambling. If you are concerned that you or someone you know may have problem with gambling, resources for help are available, such as the Tennessee Association of Alcohol, Drug & Other Addiction Services (800-889-9789), National Council on Problem Gambling (800-522-4700) and Gamblers Anonymous (626-960-3500).


Scott McNutt, business writer/publicist,