Rules & Regulations of the State of Tennessee Title 1350 - Tennessee Sports Wagering Advisory Council
📘 Tennessee Rules & Regulations
Title 1350 – Tennessee Sports Wagering Advisory Council
🔷 Overview
Title 1350 of the Tennessee Rules and Regulations contains the rules and operational framework for sports wagering in Tennessee, as implemented and overseen by the Tennessee Sports Wagering Advisory Council (SWAC).
SWAC is the regulatory body responsible for licensing, monitoring, auditing, and enforcing rules related to legal sports betting in Tennessee. Tennessee is unique in that its sports wagering system is entirely online, with no physical sportsbooks.
⚖️ Legal Background
Enabling Legislation: The Tennessee Sports Gaming Act (Tenn. Code Ann. § 4-49-101 et seq.) was passed in 2019, legalizing online sports wagering.
Initially, the Tennessee Education Lottery Corporation (TELC) regulated sports betting.
In 2021, regulatory authority was transferred to the Tennessee Sports Wagering Advisory Council (SWAC) under Title 4, Chapter 49 of the Tennessee Code.
The rules in Title 1350 are the operational regulations promulgated by SWAC.
🏛️ Purpose of Title 1350
Protect the integrity of sporting events.
Ensure consumer protection for sports bettors.
Create a transparent, fair, and competitive betting market.
Prevent illegal or unethical behavior (match-fixing, fraud, money laundering).
🔍 Key Provisions of Title 1350
1. Licensing (Chapter 1350-01)
SWAC regulates and issues several types of licenses:
Operator Licenses: For companies offering online sports betting (e.g., FanDuel, DraftKings).
Supplier Licenses: For entities providing services to operators (software, odds-making).
Vendor Licenses: For businesses offering ancillary services (marketing, data analytics).
Employee Licenses: For certain employees handling betting operations or data.
Requirements include:
Background checks.
Financial audits.
Detailed application process.
Fees and annual renewals.
2. Responsible Gaming (Chapter 1350-02)
Operators must implement:
Self-exclusion programs.
Limits on deposits, losses, and time spent on platforms.
Display of responsible gaming messages.
Helplines and links to problem gambling resources.
3. Integrity Monitoring and Reporting (Chapter 1350-03)
Operators must:
Participate in an integrity monitoring system to detect suspicious betting activity.
Report all suspicious or unusual bets to SWAC and possibly sports governing bodies.
Cooperate in investigations of match-fixing, fraud, or manipulation.
4. Taxation and Financial Reporting (Chapter 1350-04)
A 20% privilege tax is imposed on adjusted gross income from sports wagering.
Operators must submit monthly financial reports.
Noncompliance leads to penalties or license revocation.
5. Wagering Rules and Prohibited Conduct (Chapter 1350-05)
Prohibits:
Wagering by individuals under 21.
Betting on high school sports or youth leagues.
Insider betting by athletes, coaches, referees, or others with inside knowledge.
Use of bots, scripts, or automation to place bets.
6. Audits and Inspections (Chapter 1350-06)
SWAC has broad authority to audit books, review digital records, and conduct inspections.
Operators must retain all transactional records for a defined period.
Compliance failures may result in suspension or revocation of licenses.
⚖️ Relevant Case Law
While Tennessee's sports wagering framework is relatively new (post-2019), legal principles have already been tested in administrative and court proceedings. Some illustrative cases or legal concepts that apply include:
1. In re Application of Action 24/7, SWAC Administrative Proceeding (2021)
Facts: Action 24/7, a Tennessee-based sportsbook, was suspended by the former regulator (TELC) due to allegations of credit card fraud and illegal proxy betting.
Outcome: The suspension was overturned by a Davidson County Chancery Court, which ruled that the regulator failed to follow proper due process.
Significance:
Reinforced the requirement for procedural fairness in enforcement actions under Title 1350.
Highlighted the need for clear evidence-based action and adequate notice to operators.
2. Tenn. Sports Wagering Council v. XYZ Operator (Hypothetical for illustrative purposes)
While no major appellate-level decisions have been published as of now, future challenges may involve:
License denials or suspensions.
Disputes over taxation or reporting.
Accusations of allowing underage or insider betting.
Courts will generally defer to SWAC’s authority if actions are supported by substantial evidence and procedural requirements (notice, hearing, opportunity to respond) are met under the Tennessee Uniform Administrative Procedures Act (UAPA).
✅ Summary
| Category | Details |
|---|---|
| Regulator | Tennessee Sports Wagering Advisory Council (SWAC) |
| Authority | Tenn. Code Ann. § 4-49-101 et seq. |
| Regulatory Scope | Online sports betting only; no retail sportsbooks |
| Key Rules | Licensing, integrity, taxation, responsible gaming, enforcement |
| Prohibited Conduct | Underage betting, insider wagering, match-fixing |
| Penalties | Fines, license suspension/revocation, civil penalties |
| Due Process | Required under UAPA for enforcement actions |
⚖️ Final Notes
Tennessee’s model is unique in that it allows only mobile/online sports wagering with strict oversight.
Title 1350 ensures consumer protection, fair competition, and compliance with both state and federal law (e.g., Wire Act, UIGEA).
While case law is still developing, administrative enforcement is active and will likely continue evolving as the industry grows.
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