Sportsbooks in Tennesse received a betting fine due to insufficient funds

Updated –Jun 11, 2024

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In the Volunteer State, sports betting regulators recently approved fines against two sportsbooks. They are ZenSports and Fanatic Sportsbook. During their May meeting, the Tennessee Sports Wagering Council (SWC) approved a $60,000 fine for ZenSports. They failed to maintain a high enough reserve balance for their Tennesee sports betting operations. Additionally, a $50,000 fine was agreed to by Fanatics after they self-reported, self-exclusion violations.

What issues did ZenSports have in Tennessee?

For ZenSports, they ran into a funding issue in Tennessee. Sportsbooks in the Volunteer State must keep enough money in a reserve account to cover any outstanding obligations. However, the SWC found that ZenSports failed to be above the reserve requirement three times in December 2023. Since then, ZenSports has maintained an adequate balance in Tennessee. A spokesperson from SWC had this to say on the issue.

“Licensees also shall maintain a reserve in the form of cash, cash equivalents, irrevocable letter of credit, in addition to the above-referenced Bond, of not less than the amount necessary to ensure the ability to cover the outstanding liability related to the Patron accounts. The outstanding liability shall be the sum of the following amounts: 1. Amounts held by the Licensee for Sports Gaming Patron Accounts; 2. Aggregate amounts accepted by the Licensee as Wagers on Sporting Events with outcomes that have not been determined; and 3. Amounts owed but unpaid by the Licensee on winning Wagers.” -said an SWC spokesperson

Fanatics had to deal with a coding issue in Tennessee

Fanatics was able to self-report an issue where they allowed eight betting accounts to wager despite being on a self-exclusion list. Because of this, the SWC agreed to eight Level 2 fines for $6,250. This issue happened because Fanatics took over PointsBet’s Tennessee operations and the code was messed up in a self-exclusion list. Since then, they’ve been able to fix the code. They reported that six of the eight accounts placed wagers and the operator refunded any losses.

After Tennessee sports betting launched in November 2020, the Volunteer State ran into some issues in March 2021. They made US sports betting history by suspending Action 24/7’s license for failing to prevent suspected credit card and money laundering. However, the Tennesee Education Lottery ruled that a hearing could not be held for Action 24/7’s fraud allegations. They remain open in Tennessee.