Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance

Can I obtain a fantasy sports license in Tennessee? What are the requirements?

October 18, 2023

To obtain a fantasy sports license in Tennessee, you must comply with the requirements set out in TNCO 47-18-1603 and TNCO 47-18-1605.

Requirements for Licensure of Fantasy Sports Operator

To be licensed as a fantasy sports operator in Tennessee, you must submit an application and the required fee to the Secretary of State. The application must include sufficient documentation to assure that you meet the requirements for licensure, including but not limited to:

The name of the applicant;
The location of the applicant’s principal place of business;
A complete disclosure of the true ownership of the applicant;
The applicant’s criminal record, if any, or if the applicant is a business entity, the criminal records, if any, of any person owning a significant ownership interest in the applicant;
Any ownership interest held by a director, officer, policy-making manager, or principal stockholder in any entity previously or currently licensed by another entity that licenses fantasy sports operators or similar entities;
A description of any physical facility operated by the fantasy sports operator in this state, the facility’s employees, and the nature of the facility’s business;
Information sufficient to show that the applicant limits individual player deposits, protects player funds on deposit, and limits each player to one active and continuously used account;
Information sufficient to show that the applicant is in good standing with the department of revenue; and
Any other information the secretary of state deems necessary.

Additional Requirements for Fantasy Sports Operators

In addition to the requirements for licensure, fantasy sports operators must comply with the following requirements:

Fantasy sports operators shall not directly or indirectly operate or promote to Tennessee consumers any fantasy sports contest without a valid license obtained pursuant to this part;
Fantasy sports operators shall not operate or promote, in whole or in part, fantasy sports contests from this state to consumers outside of this state without a valid license obtained pursuant to this part;
Fantasy sports operators shall not offer auto draft to players or allow players to select from pre-selected teams of athletes in fantasy sports contests;
Fantasy sports operators shall not knowingly allow a minor to participate in any fantasy sports contest;
Fantasy sports operators shall not knowingly offer fantasy sports contests based on high school or college sporting events or sports whose participants are predominantly minors;
Fantasy sports operators’ advertisements for fantasy sports contests shall not target minors;
Fantasy sports operators’ advertisements for fantasy sports contests shall clearly and conspicuously depict accurate representations concerning chances of winning and the number of persons winning;
Fantasy sports operators’ representations or implications about average winnings from fantasy sports contests shall not be unfair or misleading;
Fantasy sports operators shall comply with the Federal Trade Commission, Guides Concerning Use of Endorsements and Testimonials in Advertising, compiled in 16 CFR § 255;
Fantasy sports operators’ advertisements for fantasy sports contests shall, where feasible, clearly and conspicuously disclose information concerning assistance available to problem gamblers;
Fantasy sports operators shall implement and enforce procedures for fantasy sports contests that enable players to exclude themselves from contests and establish self-imposed deposit limits, limits on entry fees per fantasy sports contest, or limits on total potential losses permissible in a given period;
Fantasy sports operators shall not knowingly advertise any contest or prize directly to a player by any means if that player is self-excluded from that prize or contest or otherwise barred from playing in that contest;
Fantasy sports operators shall protect player funds on deposit;
Fantasy sports operators shall prohibit all fantasy sports operator employees, fantasy sports operator contractors, and any spouse, children, or parents of any fantasy sports operator employee or contractor from participating in any fantasy sports contest involving a prize over five dollars ($5.00) offered by any fantasy sports operator;
Fantasy sports operators shall prohibit the disclosure of proprietary and nonpublic information by all fantasy sports operator employees and fantasy sports operator contractors that may affect the result of a fantasy sports contest to any person permitted to engage in fantasy sports contests;
Fantasy sports operators shall not knowingly allow certain persons to participate in fantasy sports contests based on the sports in which the person participates or is otherwise associated;
Fantasy sports operators shall not knowingly allow a player to enter a game or contest after that player has been provided with proprietary or nonpublic information that may affect the result of a fantasy sports contest by an athlete, sports agent, team employee, referee, or league official;
Fantasy sports operators shall offer introductory procedures for fantasy sports contests for beginning players;
Fantasy sports operators shall clearly and conspicuously identify highly experienced players in fantasy sports contests;
Fantasy sports operators shall offer some fantasy sports contests open only to beginning players and that exclude highly experienced players;
Fantasy sports operators shall prohibit the use of scripts in fantasy sports contests that give players an unfair advantage over other players;
Fantasy sports operators shall monitor all fantasy sports contests to detect the use of unauthorized scripts and ban players found to have used such scripts from further fantasy sports contests;
Fantasy sports operators shall make all authorized scripts readily available to all fantasy sports players.

Additionally, if you are already operating as a fantasy sports operator in Tennessee as of April 27, 2016, you may continue to legally operate until the later of obtaining a fantasy sports operator license or 60 days after applications for licensure as a fantasy sports operator are made available to the public by the Secretary of State. However, any fantasy sports operator operating in Tennessee without a license after the later of these events shall be in violation of TNCO 39-17-503 ^[1.3].

Furthermore, a tax of 6% is imposed on all adjusted revenues of a fantasy sports contest offered by a fantasy sports operator to Tennessee consumers, and is in addition to any other taxes levied pursuant to this title ^[2.1].

If a licensee violates any of the requirements set out in TNCO 47-18-1603, 47-18-1604, and 47-18-1608, the Secretary of State may suspend, refuse to renew, or revoke the license issued under this part, impose a fine of not more than $25,000 per violation, or both. Any fantasy sports operator who engages in or offers to engage in fantasy sports contests with Tennessee consumers without a license, as required by this part, shall be ineligible to apply for a license for a period of twelve (12) months after the violation occurred ^[1.4].

Finally, all fees and penalties collected pursuant to this part and 10% of the tax levied pursuant to the Fantasy Sports Tax Act shall be deposited in the fantasy sports fund ^[1.5].

Source(s):

Jurisdiction

Tennessee

Gaming