Sports Wagering Council highlights compliance work, illegal‑book enforcement and tax distribution to education and local governments

Director Thomas of the Tennessee Sports Wagering Council briefed the Finance, Ways and Means Committee on the council’s regulatory and enforcement work as the state’s sports wagering industry enters its fourth year.

Thomas said the council’s primary functions are licensing and registration, compliance oversight (including geolocation and age/identity verification checks), and investigations and enforcement. She told members the council conducts technical and financial audits to confirm that sportsbooks comply with state rules on geolocation, age verification, anti‑money‑laundering and payment methods (Tennessee law prohibits use of credit cards for wagering). She said the council also operates the statewide self‑exclusion system and coordinates referrals to law enforcement when operators or third parties report suspicious activity.

The director emphasized an ongoing effort to curb illegal offshore sportsbooks and said the departure of Bovada from the Tennessee market was a positive development. She said the council pursues illegal operators through cease‑and‑desist letters, subpoenas and interagency coordination, and thanked the state attorney general’s office for legal support on enforcement matters.

Thomas summarized fiscal signals from the market: sportsbook handle (total wagers placed) in Tennessee is in the billions of dollars annually; the state privilege tax is 1.85% of handle and that tax is divided 80% to the Tennessee Education Lottery Fund, 15% to counties and local governments and 5% to the Department of Mental Health. For FY25 the council estimated the lottery’s share of privilege tax receipts would be in the tens of millions of dollars (the presentation showed estimates in the low‑to‑mid‑$70 million range for distribution to the lottery fund).

The council is not requesting an increase to its operating budget; Director Thomas said operating costs are covered by licensure fees and that the council expects to remain under its current spending authority even as licensing receipts have grown. She said the council is fully staffed and will incur modest additional expense as it moves to new office space.

Committee members asked about seasonal trends in wagering (football and March Madness are the largest peaks), the source of regulatory authority, and how Tennessee operator market shares compare to other states; Thomas said confidentiality rules limit disclosure of operator level financials but noted the industry’s overall growth of roughly mid‑teens percent annually and seasonal variation tied to major sports events.

The council asked for a favorable recommendation on its operating budget and answered member questions about illegal operators, consumer protections and tax distribution.