Fanatics, ZenSports Fined by Tennessee Regulators for Compliance Breaches

Fanatics Sportsbook Tennessee and ZenSports have caught the ire of the Tennessee Sports Wagering Council because of compliance breaches, which Fanatics self-reported and ZenSports was made aware of by regulators of the Tennessee sports betting scene.

Each provider was levied significant fines, which speaks to the seriousness of each error. Fanatics, one of the industry's best sports betting sites, was deemed to have violated rules around self-inclusion lists, while ZenSports was sanctioned for not having enough funds in its account to cover the sports betting operator’s debts and obligations.

Fanatics fined 50K

Fanatics was handed a $50,000 fine by regulators in the Volunteer State for allowing eight of its users, who were on a self-inclusion list, to place bets with one of the largest Tennessee sports betting apps over a specified period of time.

The eight instances of misconduct resulted in a $6,250 fine for each infraction, totalling $50,000.

Fanatics, for its part, self-reported the “coding error” instances and made good by refunding the losses from the wagers in question. The self-own stops there, however. The company blamed the “coding” errors on the transition away from the state’s PointsBet platform and toward the Fanatics Sportsbook brand.

The partial admission wasn’t enough to sway the Tennessee Sports Wagering Council away from a substantial penalty.

“We appreciate your honesty," chairman William Orgel said during a hearing on the matter, "but please don’t appear on our agenda again for the same issue.”

ZenSports fined $60K

ZenSports Tennessee was fined for a completely different reason than Fanatics, but one that state regulators indicated was a worse violation based on the fine. The Tennessee sports betting provider was seen to have insufficient funds earmarked to cover debts and obligations in its account three separate times in December alone.

Regulations stipulate that companies that do not uphold a reserve account balance to cover such debts must report within 24 hours - something that ZenSports failed to do. In a recent meeting, a state council spokesperson cited the state regulation on the matter:

“Licensees shall maintain a reserve in the form of cash, cash equivalents, or an irrevocable letter of credit, in addition to the aforementioned bond. This reserve must be at least the amount needed to cover the outstanding liability related to patron accounts. The outstanding liability is the total of the following: 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 yet to be determined; and 3. Amounts owed but unpaid by the licensee on winning wagers.”

Like Fanatics, ZenSports had an excuse. The company cited a calculation error by its accounting department and eventually fixed the error when alerted by the Tennessee commission. There have been no other reported incidents of low cash levels since.