Tennessee sports betting regulators recently approved fines against two sportsbooks, including an operator that did not have enough money to cover its outstanding bets.
At its May meeting, the Tennessee Sports Wagering Council, or SWC, approved a $60,000 fine against ZenSports for not maintaining a high enough reserve account balance for its Tennessee sports betting operations.
The SWC also agreed to a $50,000 fine against Fanatics for self-reported, self-exclusion list violations.
Tennessee sports betting fund issue
Sportsbooks in Tennessee are required to keep enough money in a reserve account to cover any outstanding obligations. On three occasions in December 2023, the SWC found ZenSports to be below the reserve requirement.
According to an SWC spokesperson:
“Licensees also shall maintain a reserve in the form of cash, cash equivalents, irrevocable letter of credit, in addition to the above-referenced Bond, of not less than the amount necessary to ensure the ability to cover the outstanding liability related to the Patron accounts. The outstanding liability shall be the sum of the following amounts: 1. Amounts held by the Licensee for Sports Gaming Patron Accounts; 2. Aggregate amounts accepted by the Licensee as Wagers on Sporting Events with outcomes that have not been determined; and 3. Amounts owed but unpaid by the Licensee on winning Wagers.”
Since being notified of the issue, ZenSports has maintained an adequate balance. As of Friday, ZenSports has not responded to a request for comment.
Fanatics Tennessee coding issue
Fanatics self-reported that it enabled eight betting accounts to wager despite being on a self-exclusion list. The SWC agreed to eight Level 2 fines of $6,250.
Fanatics declined to provide a statement on the situation.
The bettors came from an inherited statewide self-exclusion list when Fanatics took over PointsBet’s Tennessee operations. While the bettors came off the statewide list, they remained on Fanatics’s in-house, 20-state self-exclusion list.
Fanatics said at the meeting it fixed the coding error that led to the account activations. Six of the eight accounts placed wagers, and the operator refunded any losses from the incident.
Prior Tennessee sports betting issues
Tennessee sports betting launched in November 2020. In March 2021, Volunteer State regulators made US sports betting history by suspending Action 24/7’s license for failing to prevent suspected credit card fraud and money laundering.
A Tennessee court later ruled the Tennessee Education Lottery, which at the time oversaw the industry, could not hold a hearing on the Action 24/7 fraud allegations. The sportsbook remains in operation.
Also in March 2021, the TEL reviewed an alleged college prop bet accepted by William Hill. The bet type is not allowed in Tennessee.
