Two Sportsbooks Hit with Fines Laws & Regulations

Two Sportsbooks Hit with Fines in Tennessee Over Compliance Breaches

By Lisa Spencer Senior Editor Updated: 29 June 2024

Lisa Spencer Senior Editor

As a Senior Editor at Betting.US, Lisa Spencer is a valuable member of our expert team. With a Master’s degree in Applied Mathematics, Lisa is adept in gambling theory and analyzing odds. She contributes by writing online sportsbook reviews and finding competitive markets to help our readers make an informed choice.

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It has recently been reported that Tennessee’s sports betting regulator, the Tennessee Sports Wagering Council, has imposed hefty fines on two sportsbooks over compliance breaches. According to the report, the fines that have been dished out total $111,000. The two sportsbooks that have been fined for these breaches are ZenSports and Fanatics.

The penalties were levied against the two operators during the SWC’s May meeting. Officials said that this move is a reflection of the state’s commitment to maintaining strict operational standards.

Regulators in Tennessee and other states across the country with legal sports betting have become increasingly stringent when it comes to compliance, and a range of hefty fines have been imposed on a variety of operators over recent years.

Both Operators Fined Tens of Thousands of Dollars

According to reports, ZenSports was issued a $60,000 fine due to its failure to maintain the required balance in its reserve account. Regulators said that this is crucial for covering outstanding bets.

Tennessee regulations state that sportsbooks must hold adequate funds to meet financial obligations, which is something that ZenSports is said to have violated on three occasions in December 2023. Despite rectifying the shortfall, ZenSports did not comment on the matter.

A spokesperson for the SWC said:

Licensees shall maintain a reserve in the form of cash, cash equivalents, or an irrevocable letter of credit, in addition to the aforementioned bond. This reserve must be at least the amount needed to cover the outstanding liability related to patron accounts.

Fanatics was fined $50,000 for issues related to its management of a self-exclusion list. The sportsbook self-reported that eight accounts, which should have been restricted under self-exclusion protocols, were allowed to place bets due to a coding error.

The error is said to have occurred despite the bettors being removed from a statewide self-exclusion list after Fanatics took over the Tennessee operations of PointsBet. This led to eight Level 2 fines of $6,250 each. Fanatics has since addressed the error, refunded the affected parties for any losses, and has not issued further comments on the breach.

SWC Taking Strict Regulatory Approach

Many believe that these latest enforcement actions highlight the SWC’s strict approach when it comes to the sports betting industry in Tennessee. Officials from the regulatory body are eager to ensure that the sports betting market remains fair, properly regulated, and protects consumers.

There have been other incidents when regulators have clamped down on sports betting operators in the state. In March 2021, regulators suspended the license of Action 24/7 over suspected credit card fraud and money laundering. But the Tennessee Education Lottery, which was the former regulatory body in Tennessee, was later barred by a court from conducting a hearing on these allegations. Action 24/7 continues to accept bets in the state.

There was also a 2021 incident involving William Hill, where the operator found itself on the wrong side of regulators after allegedly accepting a college prop bet, which is a type of wager not permitted under Tennessee’s betting regulations.