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Fanatics, ZenSports Fined by Tennessee Regulators for Compliance Breaches

Davis Isabela

Updated on June 13, 2024 at 9:07 PM EDT • Read time: 1 min 47 sec. Find more on Twitter and Google News.

A general view of Fanatics signage, as we examine Fanatics and ZenSports getting fined by Tennessee sports betting regulators in June.
A general view of signage during the second half of the game between the San Jose Earthquakes and Toronto FC at PayPal Park in San Jose on March 25, 2023. Photo by Robert Edwards / USA TODAY Sports via Imagn.

Fanatics and ZenSports have come under scrutiny from the Tennessee Sports Wagering Council for violations of compliance. Fanatics reported their own breaches, while ZenSports was informed by Tennessee sports betting regulators.

Significant fines were imposed on each provider, highlighting the severity of their errors. Fanatics, a top sports betting site in the industry, was found to have breached rules regarding self-exclusion lists, while ZenSports was penalized for insufficient funds in its account to meet the operator’s financial obligations.

Fanatics fined 50K

Regulators in the Volunteer State fined Fanatics $50,000 for allowing eight users on a self-exclusion list to place bets on one of the largest Tennessee sports betting apps over a set period of time.

There were eight instances of misconduct, each resulting in a $6,250 fine, for a total of $50,000.

Fanatics self-reported the instances of “coding errors” and refunded the losses from the affected wagers. However, the company only took responsibility up to that point. Fanatics attributed the errors to the transition from the state’s PointsBet platform to the Fanatics Underscoreg brand.

The Tennessee Sports Wagering Council remained undeterred by the partial admission and still imposed a substantial penalty.

Chairman William Orgel expressed gratitude for your honesty during the hearing, but requested that you refrain from bringing up the same issue on our agenda in the future.

ZenSports fined $60K

ZenSports Tennessee received a fine for a different violation compared to Fanatics, but state regulators deemed it to be a more serious offense based on the amount of the fine. The sports betting provider was found to have inadequate funds set aside to cover its debts and obligations in its account on three separate occasions in December.

According to regulations, companies are required to maintain a reserve account balance to cover debts and must report any discrepancies within 24 hours. ZenSports failed to comply with this requirement, as noted by a state council spokesperson in a recent meeting citing the state regulation.

“Licensees shall maintain a reserve in the form of cash, cash equivalents, or an irrevocable letter of credit, in addition to the aforementioned bond. This reserve must be at least the amount needed to cover the outstanding liability related to patron accounts. The outstanding liability is the total of the following: 1. Amounts held by the licensee for sports gaming patron accounts; 2. Aggregate amounts accepted by the licensee as wagers on sporting events with outcomes yet to be determined; and 3. Amounts owed but unpaid by the licensee on winning wagers.”
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Similar to Fanatics, ZenSports also had a justification for their actions. The company explained that a calculation error occurred in their accounting department, which was promptly corrected upon notification by the Tennessee commission. There have been no further instances reported of low cash levels.

Written By:
Davis Isabela
Davis Isabela is the Editor-in-Chief of Underscoreg Review. He has been a writer, reporter and editor for more than 20 years, and his work has appeared in more than 200 publications across North America. His first book, “100 Greatest Canadian Sports Moments”, was a hardcover best-seller in Canada in 2008. He has written more than 50 sportsbook reviews and dozens of other sportsbook-related content articles. James has also been quoted as a sports betting expert in USA Today and Sports Illustrated.