Tennessee Regulator Issues Fines for Five Offshore Sportsbooks

Are offshore sportsbooks finally going to test the US legal system in the Smoky Mountains of Tennessee?

The Volunteer State’s Sports Wagering Council (SWC), which regulates sports betting, has issued $50,000 to five offshore sportsbook operators this week. The operators fined are BetOnline, BetAnySports, Bookmaker, Everygame, and JazzSports. BetOnline is being fined for ignoring a cease-and-desist letter in May, while the other four are being charged with operating an illegal gaming business.

We have seen Tennessee issue many cease-and-desist letters to illegal operators over the last year, including gambling giant Bovada. The SWC threatened the operator with a $50,000 fine, leading Bovada to exit the market without further resistance. The regulator has also been cracking down on sweepstakes platforms and sports prediction markets as it looks to protect its thriving sports betting market.

After announcing the fines, the SWC went on to provide the public with four tips to spot illegal operators:

• The sportsbook extends credit

• Betting with crypto is allowed

• Online casino games, which are illegal in Tennessee, are offered

• Bets that are based on chance are offered, like betting on a coin toss

Will Operators Respond?

While the SWC has levied the fines, enforcing them may not be so easy. This is because state regulators and lawyers don’t have the authority to pursue legal action against a foreign company. Instead, they would be required to enlist the services of the US Department of Justice (DOJ). That process will take time and, assuming they accept the request, could lead to diplomatic consequences.

Prominent offshore operators, such as Bovada, have decided to adhere to cease-and-desist letters. While the international powerhouse has dominated the US unregulated market, it did not want to risk a confrontation with the DOJ that could affect its other markets.

The question now is how the five operators will respond to the SWC’s fines. 

Given that they are already willingly denying state orders but continuing to operate, it seems they could choose to ignore the fines and gamble that the federal government won’t rush to Tennessee’s aid.

If they instead decide to close their doors, it could lead more states to take similar action.