Two sportsbooks in Tennessee are being forced to pay significant fines for two completely different reasons.
The state’s regulatory body has imposed fines on Fanatics Sportsbook and ZenSports.
Fanatics Sportsbook was fined $50,000 because they accidentally let eight people who chose not to gamble still bet on their site. At the same time, ZenSports was fined $60,000 because they didn’t have enough money set aside to pay out what people could win from their bets. How these infractions will affect the operations of these top-rated sportsbooks and their commitment to regulatory compliance.
The fines were announced at the Tennessee Sports Wagering Council’s May meeting.
Fanatics Disclosed Their Infractions
The infractions were disclosed by Fanatics themselves, leading to the Tennessee Sports Wagering Council’s sanctioning of eight Level 2 violations, each costing $6,250.
Michael Levine, a senior lawyer for Fanatics, said the mistake happened because they used an old list from Tennessee that stopped people from gambling. This list was from when they started in Tennessee in 2023. Because of this, some people who were no longer banned in Tennessee could bet again, even though they were still banned in 20 other states where Fanatics operates. The self-exclusion list is meant to help people who want to take a break from betting.
Upon recognizing the error, Fanatics swiftly rectified the coding glitch and reimbursed the affected bettors for their losses during the exclusion period.
“We take it extremely seriously and we will ensure that if someone places themselves on whether in-app self-exclusion or Tennessee self-exclusion that we comply with those requests,” Levine told the Tennessee Star.
ZenSports Also Heavily Fined
ZenSports incurred a penalty not for the reasons commonly associated with sportsbook fines. Instead, their fine was due to a shortfall in their reserve account, which is mandated to cover all outstanding wagers and related obligations.
Tennessee’s betting companies must have enough cash set aside to pay what they owe. Last December, the state’s gambling authority caught ZenSports not having enough money saved three times. After being told about this, ZenSports has kept their account balance up to the required level.
A press release from the Sports Wagering Council explained the infraction this way:
“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.”
According to the Tennessee Star, ZenSports Chief Commercial Officer Eddie Ponce told the SWC, “The capital wasn’t an issue but it was a calculation error.”
Both operators are said to have complied and paid the fines levied against them.
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