On January 1, Tennessee’s Sports Wagering Advisory Council (SWAC) will replace the Tennessee Education Lottery as the state’s sports betting regulator. SWAC Executive Director Mary Beth Thomas, who began her job on November 1, said the SWAC “absolutely” expects the transition to go smoothly.
However, Thomas said the SWAC is developing a new set of sports betting rules and regulations and that may impact the application or renewal process for operators. The rules are likely to be similar to those the Tennessee Education Lottery created.
“The most challenging aspect is the fact that there are operators who are midway through the licensing application or renewal process. We have included provisions in our draft rules to address the situation where an operator has applied under the TEL rules, but will be approved at a time that the SWAC rules are in place. We are working with operators to make sure that they understand the process. They all seem to be proactively thinking about what both the TEL and the SWAC need and we plan to work with them to make sure we are all on the same page,” Thomas said.
She noted new staff members will be coming aboard by the end of the year and that will help move the process of taking over regulatory duties. “One of our priorities is to move at the speed of business so that we do not slow down this booming industry. We expect to have emergency rules in place by the end of the year, as we hoped,” Thomas said. The emergency rules go in effect for 180 days.
One area of controversy the rules committee may address is the state’s minimum 10 percent hold on adjusted gross sports betting income. That rule was the target of intense negative feedback during a public comment period. BetMGM, Caesars, DraftKings and FanDuel have said they want the rule eliminated.
Observers said it’s more likely operators could fix any hold deficit without a fine or formal violation. Currently, if operators fall short of the mandatory 10 percent hold, they can pay the fine, up to $25,000, or under the proposed change, pay the difference in taxes between what they would have paid if they had hit 10 percent what they already paid.
Betting handle from January through October was $2.023 billion with adjusted gross income of $152.4 million, only a 7.5 percent hold.
