New TN Sports Betting Regulators Outline Next Steps

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TN sports betting

The new TN sports betting regulators have plenty to keep themselves busy until power is formally shifted on Jan. 1, 2022.

The nine-member Sports Wagering Advisory Council gained some power late last month after Gov. Bill Lee signed a bill transferring authority. The SWAC now has the duty to promulgate rules, which needs to be done before it takes over fully as the new regulator in 2022.

The SWAC’s first official meeting was last week, though it took time to acquire the audio recording. Neither the SWAC nor the Tennessee Education Lottery will hold call-in lines now that in-person meetings have returned at state offices in Tennessee.

Who’s in charge?

There also appeared to be some confusion over whether the SWAC or the TEL was in charge of releasing the audio.

“We have no staff yet. Soon we hope. Lot of folks working hard,” SWAC Chairman Billy Orgel told LSR via email.

Last week’s meeting served more for planning purposes for the future of Tennessee sports betting and its new regulator. The next SWAC meeting, scheduled for June 29, should include more action items based on this conversation.

TN sports betting rules will be examined

The SWAC has a bunch of tasks on its plate, many of which will have to be done simultaneously.

One includes hiring staff. The SWAC talked briefly about looking into an outside company that would bring them qualified applicants for the executive director role.

Another important task includes the rule-making process. The process is a bit different this time around, though, as it will involve the Tennessee legislature.

Tom Lee broke down the situation, explaining the board can either set emergency rules or permanent rules. As soon as those emergency rules are live, though, the SWAC becomes responsible for current licensees. That is not exactly ideal considering the lack of staff.

The permanent rule process also has to go through the legislature, which it did not before. The new process requires approval from the government operations committees in both chambers.

Will Tennessee rules change?

Hanes Torbett asked why any rules would be changed at this point. It is a decent question to ask considering the Tennessee sports being market only launched last November. The state passed $1 billion in handle in April, the fastest state to break that mark.

Lee explained that the SWAC might choose to change a rule and as the new regulator, that’s a good enough reason. Also, with the legislature now involved and a lot of fresh faces looking at the rules, there could be more ideas coming to the table.

“I couldn’t speculate on intent, Hanes, but I guess I would just say we’re two years into this operation and the legislature just rewrote it,” Lee said to chuckles from the rest of the meeting participants. “So I assume they’re not afraid of making suggestions about what the rules are. And I don’t know what those suggestions are or will be but they just passed a 33-section bill with no dissenting votes. So I assume they’re interested and wanting to participate in the process.”

Lee mentioned the public process also opens the SWAC up to questions both about the rules and other topics.

One of those topics could be how the TEL failed to handle the Action 24/7 suspension properly and how the SWAC intends to avoid those types of mistakes in the future.

Existing TN sports betting applicants not guaranteed NFL launch

The change in the regulatory structure might cause five hopeful Tennessee sportsbooks to miss the start of NFL season.

The SWAC agreed the TEL should continue to operate as it has, which means no pending applications will be put on hold. There are five operators, six suppliers and about 20 vendors waiting to be licensed, TEL CEO Rebecca Hargrove told the SWAC.

Those five operators have been in a holding period since at least mid-May.

Alonda McCutcheon, the TEL’s general counsel, said the process might take longer than usual with how many applications there are. The operators want to launch in time for the start of NFL betting when the league begins Sept. 9 but that is not promised at this point, McCutcheon said:

“I just want people with pending applications out there to have that understanding that we’ve got our next regularly scheduled meeting of the board and the [sports wagering] committee August 18. I cannot guarantee that we would have all five of those operator applications and their corresponding supplier applications ready for that August date.”