The Sports Wagering Advisory Council (SWAC) will hold a public comment period on Tuesday, Oct. 5 to discuss proposed updates to Tennessee’s sports betting regulations.
Members of the general public have until this Friday, Sept. 24 to register for recognition during the forum.
New proposed sports betting rules advance to public hearing
A special trio from the SWAC formed a subcommittee back in June to begin devising a new draft of Tennessee sports betting regulations.
This Rulemaking Committee, comprised of chair Tom Lee along with fellow SWAC members Samuel Lee and Kandace Stewart, met two separate times to construct a new set of proposed rules.
These suggested updates were then presented to the council during an Aug. 24 meeting. The SWAC approved the initial draft of the rules, thus advancing them to a public comment period.
After the council takes public comments into consideration, it can edit the rules if necessary and advance them through the legislature to be ratified into law.
According to the committee, instilling a set of permanent rules by the time the SWAC takes over as the regulatory body for sports betting on Jan. 1, will be a nearly impossible task given the current timeline.
Instead, the special committee’s proposed emergency rules can be in effect for six months. This gives the council adequate time to promulgate a set of permanent rules before the emergency rules expire.
Suggested updates to Tennessee’s sports betting rules
Among the adjustments made to Tennessee’s current sports betting rules is Chapter 1350-01 , which concerns sports gaming license standards. The committee consulted with betting experts to amend the definitions of terms such as vendor, parlay, teaser, and proposition wager in the new draft.
And in the future, suppliers will not face a $10,000 application fee, nor will vendors pay a $500 fee.
Chapter 1350-02 discusses the license dispute resolution and reinstatement process. Updates address the proper grounds for revoking a license and requirements for due process.
Finally, Chapter 1350-03 addresses Tennessee’s minimum internal control standards. Recent updates enhance the vetting procedures required for key personnel when a change of control occurs. Additionally, the committee adjusted wording regarding background check requirements.
Another new addition to the rules is the acceptance of gift cards as a means of funding sports betting accounts. One Tennessee sportsbook, BetMGM, has already taken to the streets with its new gift card deposit option.
Tennessee’s unique 10% hold requirement
The special committee also proposed a shift in the way Tennessee’s one-of-a-kind 10% hold requirement is enforced.
The committee will continue to require operators to cap annual payouts at 90%, but it will change the way it issues fines.
As it stands, operators can only face a single annual fine of up to $25,000 for failing to meet the 10% hold requirement.
In an attempt to make this penalty feel less nominal to operators, rule-makers advocated for issuing fines on a quarterly basis rather than an annual one. As a result, operators would risk $100,000 in fines per year rather than $25,000 for violations.
Now that the committee has established these draft rules, the public can weigh in on the changes.
SWAC welcomes public comment period
The SWAC welcomes discussion and suggestions concerning these new recommended rules in the form of informal comments during its Oct. 5 meeting.
Staying true to Tom Lee’s emphasis on public scrutiny throughout the entire rulemaking process, the council invites interested parties of all types to weigh in on the matter.
In order to be recognized for comment, members of the general public can apply by emailing [email protected] by Friday, Sept. 24.
The SWAC will set the time limit for each comment based on the total number of requests received.
Those that aren’t able to attend the Oct. 5 meeting will be able to submit written comment via an online portal for review by the SWAC.
The Rulemaking Committee will convene one last time after the public comment period to generate an official version of the new proposed rules.
Once presented and reviewed, the council will cast a final vote in November before sending the regulations for legislative review.