Tennessee SWAC Approves Emergency Sports Betting Rules

The Tennessee Sports Wagering Advisory Council wrapped up an important step Thursday in its process of taking over sports betting regulatory duties from the Tennessee Education Lottery. 

Thursday, the SWAC approved a set of emergency rules. Those rules, which aren’t drastically different than what the lottery currently uses, will last for 180 days. During that time, the SWAC will work to create and implement permanent rules. 

The SWAC will take over as the regulator on Jan. 1. 

10% hold stays

The emergency rules include the state’s controversial 10% hold rule. Tennessee’s hold provision requires operators to win at least 10% from bettors as their gross revenue “hold.”

The national average for hold is 7%, as operators keep an average of $7 per $100 wager after the bettor is paid. Tennessee has included the 10% hold in its rules since operators launched mobile sports betting in the state on Nov. 1, 2020. 

If the operator fails to meet the hold requirement, they face the potential for an annual penalty. During the rulemaking discussion process, there was some conversation about issuing the potential $25,000 fine more frequently than annually. Ultimately, the SWAC decided to keep the fine as a potential annual penalty. 

Additionally, the rulemaking committee added a new option for operators that fall short of the hold requirement. Operators have the option to pay a privilege tax payment equal to the difference between what they would’ve paid had they adhered to the hold and what they actually paid.

During the permanent rulemaking process, there will be another public comment period and deeper discussion about the SWAC’s rules. SWAC members have mentioned a willingness to consider rule changes in the future, if data suggests a rule change could benefit consumers and the state.  

Discussion of gambling addiction services

The group also spent time Thursday discussing sports gambling addiction within Tennessee. There’s a desire among the SWAC to ensure problem gamblers gain the help they need. 

It was brought to the SWAC’s attention in previous meetings and Thursday that Tennessee REDLINE, a hotline for addiction treatment referrals provided by the Tennessee Association for Alcohol, Drug and other Addiction Services (TAADAS), has received calls completely unrelated to addiction. Calls sometimes come from bettors wanting help with their sportsbook accounts because they saw the number on a sportsbook advertisement. 

Sports betting addiction — and how to best help alleviate the issue — seems like it will be a topic discussed in future SWAC meetings as the group aims to gain a better understanding of the issue and how to help problem gamblers. The SWAC emergency rules also allow for national gambling addiction hotlines to be used in some circumstances instead of the Tennessee REDLINE.

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