Yes, It’s Still Illegal To Bet Through A Bookie In Tennessee

Posted on October 29, 2020

With the launch of legal sportsbooks in the Volunteer State, some may wonder if the legal status of Tennessee bookies has changed. The short answer to that question is, no.

Placing a bet with a bookie in Tennessee violates not only federal but state law as well. While the odds of prosecution remain low, it’s not worth the risk with legal options for wagering in place.

Tennessee bookies: what federal law says about betting this way

Although the Professional and Amateur Sports Protection Act is no longer valid, there are two other federal laws that govern sports betting which are still in place. Those are the Federal Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006.

The Wire Act essentially says it’s illegal to transmit funds or information for gambling purposes across state lines. The UIGEA makes it illegal for banks in the US to process payments they know are for gambling.

An example of when using a bookie might violate the Wire Act is an out-of-state bettor sending cash on PayPal or Venmo to a friend in Tennessee to place a bet with.

Even if the Tennessee resident makes that wager for another person using a sportsbook licensed in the Volunteer State, it’s still a violation of federal law.

The UIGEA is potentially more meaningful for similar transactions that happen within the state. Suppose a Tennessee resident places a cash bet with a bookie also in the state. The second that bookie deposits those funds in a bank account or the bettor deposits her/his winnings in a bank account, a potential UIGEA violation has occurred.

Federal authorities historically haven’t investigated and prosecuted crimes along these lines unless they represented a high dollar amount, normally at least five figures. However, that can change at any time.

Additionally, that doesn’t guarantee that local and state authorities won’t act on illegal gambling. With the advent of legal sports betting in Tennessee, the state now has a vested interest in rooting out bookies.

State law on the subject of Tennessee bookies

When it comes to state law on this matter, it’s pretty simple. In order to legally accept wagers in Tennessee, a company and/or person must possess a license to do with the Tennessee Lottery.

The process of acquiring a license involves background checks and a review of financial interests. Moreover, the state exacts a privilege tax from licensees based on the book’s adjusted gross income.

So, even if accepting wagers without a license was not a crime in Tennessee, bookies would still be in violation of state law, because they aren’t paying the privilege tax on their aggregate revenue.

Those taxes also part of the reason to use legal channels instead.

Why legal sportsbooks are the better choice in TN

Aside from the fact that you can use licensed sportsbooks without having to worry about breaking the law, there are other reasons going the regulated route is superior. There are benefits for everyone.

For bettors, you’re guaranteed a way to resolve disputes with the sportsbook. There’s nothing to stop a bookie from delaying paying out your winnings or flat out refusing to do so, for example.

If you approach authorities about a dispute with a bookie, you’d expose both that person and yourself to possible prosecution. There’s also the matter of responsible gambling.

Licensed sportsbook operators participate in programs designed to protect people with compulsive gambling issues. They not only won’t take bets from people who exclude themselves, but won’t market their products to those individuals either.

Sports betting taxes fund free treatment programs for people with such issues as well. That isn’t all that gambling taxes support, however.

Even people who never place a bet benefit from gambling taxes through the state services they support. Bookies, on the other hand, pay no taxes and prey upon people with gambling problems.

With legal sportsbooks in action, the risk of using a bookie doesn’t make sense. It’s better for everyone if those who want to bet on sports in Tennessee use the legal channels instead.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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