The Tennessee Sports Wagering Advisory Council met Wednesday to discuss a jam-packed agenda. The SWAC punted decisions on a few major issues, but the meeting still offered some newsworthy information.
Notably, Fanatics Sportsbook received a mobile sports betting operator license. While the company has yet to launch a mobile sportsbook in any state, it expects to enter Tennessee’s mobile market in the near future. When pressed on if the sportsbook would be live ahead of March Madness, Fanatics Vice President of Regulatory Affairs Alex Smith replied vaguely.
“We hope you’re taking bets with us very, very shortly after this meeting,” Smith said.
A pre-March Madness launch seems unlikely, though.
Fanatics is not ready to go live in Massachusetts on March 10 when mobile sports betting launches in the state, but it is expected to start there in May. Fanatics recently opened a retail sportsbook in Maryland, and it expects its mobile sportsbook to go live in Ohio and Maryland in the coming months. It hasn’t shared an official launch timeline for either state.
10% hold discussion tabled
The SWAC agenda suggested the group could make a decision related to issuing operators fines for failing to uphold the state’s 10% hold requirement. The rule requires operators to have a 10% hold on gross sports betting revenue. When they don’t, they’re given the option to either pay a $25,000 fine or a privilege tax payment equal to the difference of what they would have paid had they adhered to the hold and what they actually paid.
Several operators failed to hit the threshold and could face fines of $25,000. Despite possible fines, some members of the SWAC were concerned those penalties didn’t properly address the volume of potential tax revenue being left on the table.
Instead of coming to a determination Wednesday on how best to move forward, the SWAC tabled the discussion until the end of Tennessee’s legislative session in May. There’s an expectation that the legislature — with input from sports betting operators — will arrive at a solution in the coming months.
The SWAC is also tabling discussion related to operators violating the state’s 10% hold rule until after the state’s 2023 legislative session. Sounds like the state legislature plans to look at the rule in the coming months.
— Bennett Conlin (@BennettConlin) March 1, 2023
“I recommend that we leave it to the policymakers to decide what they would like to do,” SWAC Executive Director Mary Beth Thomas said.
The SWAC also punted a decision on the request from two operators to use unofficial league data for NFL wagering. Thomas recommended the legislature review the topic of official league data mandates rather than leaving the SWAC to decide.
Fines issued to operators
At the end of the meeting, the SWAC approved issuing notices of violations to PENN Entertainment (Barstool Sportsbook) and Hard Rock.
Barstool Sportsbook customers in Tennessee placed 184 prop bets on college football games during the 2022 season. Tennessee doesn’t allow prop bets on college sporting events, and the SWAC plans to fine the sports betting operator $92,000 for the violations. The prop bets were settled, with winning wagers paid out and losing wagers refunded.
Hard Rock Sportsbook allowed five bettors to fund their accounts with credit cards, a violation of Tennessee rules. Additionally, the sportsbook had a geolocation issue that allowed customers outside the state to deposit to their account via desktop computers. The two violations resulted in a fine of $70,000, with the credit card issue accounting for $60,000 worth of that fine.