Today marks one month before the Tennessee Sports Wagering Advisory Council (SWAC) assumes control of regulatory duties for sports betting from the Tennessee Education Lottery. As it prepares to do so, it could approve emergency regulations over its own activity to help the transition go smoothly.
Tennessee Advancing Sports Betting Activity
Mary Beth Thomas, SWAC Executive Director, expressed her confidence that the SWAC would be ready to take over regulatory duties as soon as January rolls around. The SWAC must take a few key steps in the next weeks to prepare for the transition. Setting emergency rules is perhaps the most important step of the transition process. The SWAC, as the state’s regulator, will need its own set of rules, as well
Thomas and members of the SWAC rulemaking group have been hard at work creating emergency rules. The group voted to recommend a set of emergency rules prior to Thanksgiving. The SWAC will receive the recommendations, which are very similar to the current rules of the lottery, at its next meeting.
This meeting will be held on Thursday at 11 AM CT.
More Work To Be Done
If the SWAC approves emergency rules, they will go into effect for 180-days. It will then work to create and implement permanent rules within the 180-day window.
The new rules will likely keep the lottery’s controversial 10% holding rule. Hold provisions require operators to “win” a minimum of 10% from bettors as a gross revenue hold to avoid penalties. Nationally, the average hold rate is 7%. This means that operators receive $7 per $100 wager after the bettors are paid. This rule was in place at the time of mobile betting’s launch on November 1, 2020.
During the public comment period, most stakeholders voiced their concerns about the hold. Representatives of BetMGM, Caesars DraftKings (FanDuel), FanDuel and TwinSpires spoke out against this rule. Some consumers spoke out as well.
The SWAC didn’t change, but the 10% hold remains part of the recommended emergency rules. After time passes, however, the council allowed for reconsideration of that rule and other rules.
SWAC Continues to Take Shape
Thomas made several notable hires in November. Three of her most important staff additions will soon be working at the SWAC. Keith Boring, the new chief of staff, began work on November 15.
Stephanie Maxwell is the general counsel of SWAC, having started last Monday. Roger Guillemette will be the deputy director of licensing, gaming and compliance.