The Tennessee Sports Wagering Advisory Council held a special meeting Tuesday, Feb. 23.
Members discussed the approval of new sportsbooks, sports betting pools, peer to peer wagering platforms, and alternative deposit methods.
January revenue figures show TN wagering continues to grow
Tennessee Education Lottery (TEL) CEO Rebecca Hargrove began today’s meeting by confirming January wagering totals. Overall, handle topped $211 million, resulting in $190 million in gross payouts to players.
Tennessee’s four operators kept $21.8 million in adjusted gross income, and the state of Tennessee gathered $4.3 million in privilege tax.
Initial Super Bowl betting results revealed that Tennessee bettors profited $12 million from the $15 million in total wagers.
While that handle is not enough for Tennessee to crack the top-five in terms of Super Bowl betting this year, it was still a very strong showing.
Tennessee beat more mature markets like Oregon ($3.46 million) and New Hampshire ($7.1 million).
Suspicious betting activity at two online sportsbooks
While January’s sports betting handle was impressive, not all of it came from legal accounts.
During a previous meeting on Feb. 17, the TEL released information concerning an ongoing investigation involving 74 closed player accounts at two sportsbooks.
TEL Sports Gaming Investigator and veteran Secret Service member Danny DiRienzo is working in conjunction with investigators on the issue.
DiRienzo divulged that the account closures included individual accounts that were in violation of the rules, as well as multiple accounts that were being used by a single bettor.
Sportsbooks have since confirmed and identified the player accounts involved. Some bets were canceled before the Super Bowl commenced, while other player accounts were closed altogether.
Since the matter is still under investigation, the TEL could not reveal further information.
Ultimately, these shutdowns were performed in order to enforce compliance laws and rules written into the statute.
Lottery members are intent on preserving the game’s integrity by ensuring no illegal sports wagering occurs in the state of Tennessee.
Sports betting pools will likely get the green light
Once the issue of the illegal accounts was discussed, members moved on to expanding legal wagering options in the state.
Now that the Super Bowl is over, bettors and fans alike await the arrival of March Madness.
The TEL discussed the potential approval of sports betting pools such as paid college pick ems, March Madness brackets and survival pools.
These contests would offer set prize amounts with parameters set by the sportsbook.
Other states with legal wagering currently permit paid pools. And technically, Tennessee’s statute already authorizes such games.
Many committee members supported the idea, seeing it as a low-to no-risk method to create an additional revenue opportunity.
With so many sports enthusiasts participating in unsanctioned pools and brackets every season, it makes sense for the state to profit off of that.
Sports betting pools are a good idea for Tennessee to keep the sports betting growth continuing after the football season.
Council members not sold on peer-to-peer platform
One potential operator still awaiting approval, ZenSports, was a primary subject of discussion during the meeting. Along with its traditional sportsbook, the platform proposed a unique peer-to-peer betting model for approval in Tennessee.
No other jurisdiction currently permits this model, where players can set their own bets, odds, and terms. Fellow users are free to accept these bets and invite others to join them.
CEO Rebecca Hargrove says she will not be inclined to approve the model it until she knows it is in fact permitted in the state’s gaming statute.
“I think personally we need a bit more time to study this . . . We are not in favor of it, but we are more than willing to put some more time into analyzing it.”
Hargrove says protecting the ethics of the game is paramount in this decision:
“It’s important to us that we protect the integrity of sports betting in Tennessee as we have with lottery purchases in Tennessee.”
In order for the model to move forward, the TEL would need to establish rules and regulations to make the concept uniform across operators.
While Hargrove was against the idea, not all members were in the same boat. Sports Wagering Advisory Council Chairman Billy Orgel encouraged the committee to explore the idea further.
“This could be another opportunity for Tennessee to lead the nation in gaming. I’d hate to shoot it down and find out we’ve missed the boat.”
Options changing for how to fund a sportsbook account
The final subject up for discussion was the idea of approving gift cards as an additional account funding method. The request was made by a vendor in conjunction with two operators.
Cards would be made available for purchase in stores as well as online, though online purchases would be limited to delivery to a Tennessee address.
Orgel expressed his approval of the concept, with the stipulation that gift cards should be available for purchase via cash only. His concern being, any other form of payment might make it easier for people to accrue debt by gambling with borrowed money.
The committee plans to provide a resolution to gift cards during the next meeting, as well as discuss the idea of cryptocurrency as a method of funding.
The issue of gambling debt doesn’t stop there.
Tennessee Senate Bill 1029 will likely be another topic of discussion in the next meeting. The bill prohibits sports betting operators from allowing bettors to wager at the same location where they entered into select financial contracts.
These agreements include:
- Flex loan plans
- Title pledge agreements
- Deferred presentment services
- Check cashing transactions
The bill was filed Feb. 10, passed on First Consideration Feb. 11, then passed on Second Consideration Feb. 22.
If passed, this could impact the ability of Action 24/7 users to fund their accounts at select Advance Financial locations.
Some council members have voiced concerns over users being able to deposit at a loan service location.
After all, the TEL has made it abundantly clear that integrity is of the utmost importance.
