Tennessee Regulator Lashes Out Over Sports Betting Violations

Officials in the Volunteer State spoke up on an issue top of mind for sports betting regulators across the US.

During a Tennessee Sports Wagering Council (TSWC) meeting earlier today, things got tense when discussions of violations by Caesars Sportsbooks came up. While they reviewed the violations and approved fines for the Las Vegas operator, Chairman Billy Orgel interrupted to lash out at the “human error” blamed when sportsbooks violate state regulations.

Although the interruption caught many attendees off guard, Orgel made critical points that raised several questions for operators like Caesars.

Are Sportsbooks Using the System?

Orgel’s outburst centered on frustration with how sportsbooks handle violations. In most cases in the US, operators self-report violations and often blame human error or a software glitch. This typically results in lower fines, with regulators hoping it will encourage sportsbooks not to hide violations when they are detected.

While this process has become common, we haven’t seen any signs that the violations are slowing or truly being addressed. As a result, there is reason to wonder whether operators are taking advantage of regulators' leniency by using the same excuses without enacting the changes needed to prevent them in the future.

Orgel stopped short of directly accusing Caesars or its peers, but his frustration suggests he believes the current system isn’t working. 

What About The Tech?

Orgel also commented on the advanced technology supposedly in place at regulated sportsbooks. He pointed out that the regulator has impressive tools to help ensure compliance, despite only having a fraction of the budget of sportsbooks like FanDuel or DraftKings. How is it that their industry-leading tech is still resulting in small but often dangerous violations? 

While no person or technology is perfect, there is reason to doubt sportsbooks' true intentions when using them. This is evidenced by the recent scandal involving DraftKings, which is being accused of using AI to target losing and struggling bettors. 

Do sportsbooks truly use their tech as intended, or are mistakes happening because they aren’t?

Small Violations, Big Problems

To be fair to the sports betting industry, the wagers and bettors affected by typical sportsbook violations are minimal. However, this doesn’t mean they aren’t dangerous.

One example is the violation Caesars was fined for by the TSWC. The TSWC found that it offered prop bet markets on NCAA baseball and volleyball events. It involved only 118 wagers for less than $5,000, but it also put athletes unexpectedly at risk of harassment.

The NCAA and several of its largest conferences have been waving the red flag over a spike in the harassment of athletes. Angry bettors are threatening them online, blaming them for their losing wagers. This is especially dangerous for athletes in the non-major sports (football, basketball), as they have less support and fewer resources to fight harassment, leading to long-term mental health damage.

Other common violations include marketing to residents on self-exclusion lists, accepting wagers from underage bettors, and offering wagers on banned markets. All of these carry risk for either bettors or athletes, meaning they are not as harmless as regulatory proceedings may make them seem.