Tennessee’s Sports Wagering Advisory Council (SWAC) held its first meeting on Tuesday, June 1 to discuss the continued transfer of regulatory power over the state’s sports betting industry. The SWAC is taking over the role from the Tennessee Education Lottery (TEL).
The discussion centered around the council hiring an executive director.
Sports Wagering Advisory Council begins transition process
In mid-April, SB 0588 passed, stripping the TEL of its regulatory power over the Tennessee sports betting industry and handing the responsibility over to the SWAC.
Gov. Bill Lee then signed the legislation into law on May 27, although the full transition of power does not officially take place until Jan. 1, 2022.
For now, the committee must begin tying up loose ends and addressing preliminary issues.
SWAC Chairman Billy Orgel opened the council’s introductory meeting, which was held in Nashville for the first time since the onset of the COVID-19 pandemic.
The nine-member council discussed a variety of topics on the meeting’s agenda.
However, one recurring topic made it clear that the council’s primary priority is finding a new executive director.
The search for executive director begins
Danielle Boyd, the former vice president of sports gaming operations, resigned from the role in March. She accepted a more lucrative job opportunity at Hard Rock Digital in Fort Lauderdale, Florida.
Jennifer Roberts preceded Boyd, but only served in the role for six months.
The council stressed the importance of ensuring considerable compensation for the new director.
This would hopefully prevent another early exit within such a competitive environment. In order to find top-tier talent, member Tom Lee endorsed of the idea of using a third-party search firm to locate and vet potential candidates.
Council member Hanes Torbett acknowledged the council’s limited knowledge on the subject. He agreed that a search firm could provide the necessary expertise for finding the appropriate candidate.
One council member raised the question of where the funds for a director’s salary come from. Alonda McCutcheon, TEL executive vice president and general counsel member, explained that the salaries of an executive director and all necessary staff members come from the licensing fees paid by operators.
Seven Tennesseee online sportsbooks, along with a number of vendors and suppliers, currently pay a yearly licensing fee.
Any funds not utilized for expenses are then allocated to the Tennessee Promise Scholarship, which gives students the opportunity to attend a community or technical college for free.
The process of finding an executive director could take an untold amount of time. Nonetheless, Orgel is confident that the remaining pieces will fall into place soon after the hiring process is complete.
New operator applicants and license renewals
Until the transfer of power is finished, the TEL will continue reviewing applicant licenses in conjunction with the SWAC.
McCutcheon noted that the TEL is currently reviewing applications from five potential operators, six suppliers, and approximately twenty vendors.
Operators are hopeful to launch by the start of NFL season. But with so many pending applications, the process could run anywhere from four to eight weeks.
McCutcheon said the TEL continues to process applications with that goal in mind. There is no guarantee, however, that all five operator applications and corresponding supplier and vendor licenses will be ready by September.
Current operators also need to renew their licenses in the near future.
The licenses of Tennessee’s first four sportsbooks – Action 24/7, BetMGM, DraftKings and FanDuel – expire October 31.
The TEL requires operators to submit license renewal information 60 days prior to expiration. That date falls at the end of August.
Council faces crunch of short transition window
Although complete regulatory power will not transition to the SWAC until Jan. 1, the need to instill some semblance of structure before then is ever-pressing.
As more operators are approved, more employees will need to be brought on. For example, the TEL recommended a minimum of two investigators for the SWAC.
McCutcheon said the SWAC may ultimately require more than four or five.
TEL CEO Rebecca Hargrove added that the number of investigators depends on whether the SWAC employs sub-contractors during the initial application review process. The TEL currently utilizes several outside contracts to assist staff with financial analysis and investigative services.
The SWAC will hold its next meeting on June 29 in Nashville to further discuss these issues.
Meanwhile, the TEL will continue to loosen its grip as the SWAC finds comfort in overseeing Tennessee sports betting.
