Tennessee’s crackdown on illegal offshore sportsbooks continues to intensify as the state’s Sports Wagering Council (SWC) has imposed $50,000 fines on Lowvig and Sportsbetting.ag for operating illegally. The two sportsbooks failed to comply with cease and desist letters sent to them in April, making them the sixth and seventh illegal operators to face penalties as part of Tennessee’s efforts to protect consumers and maintain a safe and regulated sports betting market.

Growing Efforts to Eliminate Illegal Sportsbooks

The SWC is determined to eliminate illegal sportsbooks that have infiltrated Tennessee’s online betting scene, which has seen over $5 billion wagered this fiscal year. The agency’s Executive Director, Mary Beth Thomas, highlighted the importance of a regulated market, noting that while licensed sportsbooks in the state go through a rigorous vetting process, illegal operators bypass these crucial protections.

Thomas emphasized the risks consumers face when engaging with unlicensed sportsbooks, stating, “If a consumer continues to do business with an illegal sportsbook, they are giving away their personal and financial information to criminals.”

The SWC’s actions against these illegal operators are designed to safeguard the public’s interests and ensure that sports betting in Tennessee remains fair and secure. The penalties for running an unlicensed sportsbook can escalate with each violation under the Sports Gaming Act, starting with a $10,000 fine for the first offense and increasing for subsequent violations.

Penalty Structure and Enforcement

Under Tennessee law, the SWC can impose fines of up to $25,000 for each violation. Each wager placed with an unlicensed operator counts as an offense, which allows for substantial penalties for repeat offenders. This penalty structure aims to deter illegal activity and prompt voluntary compliance from operators.

Illegal sportsbooks are often identified by the products they offer, which violate state law. These include extending credit to bettors, accepting cryptocurrency wagers, and offering casino-style games such as slots, online poker, or chance-based bets like coin tosses.

Licensed sportsbooks, in contrast, must comply with stringent regulations, including ensuring that customers are of legal age, verifying their identities, and safeguarding their financial and personal information. These legal operators are required to hold reserves for payouts and provide consumer protections not available through illegal offshore sites.

Tennessee’s Expanding Enforcement Campaign

This fine against Lowvig and Sportsbetting.ag is part of a broader enforcement effort that has already seen significant penalties levied against other illegal sportsbooks in the Volunteer State. The SWC has imposed over $250,000 in fines since March, with several high-profile operators such as BetUS, MyBookie, and Xbet receiving penalties. The SWC has also issued cease and desist orders to operators like BetOnline, which is the latest target of the agency’s crackdown.

Tennessee’s aggressive stance mirrors efforts in other states, with Michigan regulators recently issuing similar cease and desist orders to offshore sportsbooks. As the SWC continues its crackdown, the goal is to eliminate illegal sportsbooks from the state entirely, with the broader aim of curbing the $64 billion illegal market across the U.S., which significantly impacts tax revenue and consumer protections.

Challenges in Enforcing Laws

Despite the SWC’s efforts, eradicating illegal sportsbooks is no easy task. Many of these operators operate beyond the reach of U.S. law enforcement, making enforcement actions more difficult. Additionally, these offshore operators often shift to new domains or payment processors to evade detection.

However, Tennessee’s continued focus on enforcement and public awareness campaigns seems to be making an impact. Operators like Bovada have already voluntarily exited the market, and the SWC’s persistent actions are likely to continue applying financial pressure on illegal sportsbooks operating in the state.

As the state leads the charge in fighting illegal sports betting, its success may set a precedent for other states, shaping the future of the illegal sports betting market in the U.S.