Despite the fact that Tennessee’s Attorney General, Herbert Slatery wrote an opinion that Daily Fantasy Sports was illegal under state laws, a new bill legalizing and regulating the industry will take effect on July 1st this year.
Tennessee effectively became the third state in the US to regulate its DFS industry after Governor Bill Haslam approved a measure which passed fairly easily through the Senate and the House. As such, the state will join Virginia and Indiana with a state appointed authority to regulate and license DFS operations.
The Senate passed the bill 27-2, before it moved to House vote where is passed 67-17. The decision was left in the hands of Governor Haslam who opted to make his historic decision of making Tennessee the first state to regulate DFS despite an opposite opinion by its AG.
DFS operator, DraftKings reacted to the news in a statement by saying that Tennessee became yet another state to enact a regulatory framework that allows residents to continue plying the games they love. DraftKings thanked the governor for his leadership and the members of the legislature, especially Pat Marsh and Senator Jack Johnson who “provided tireless guidance on this important issue”. The operator said that it would continue to work with legislators in other states across the country in order to implement appropriate consumer protections for its fans.
Also commenting was FanDuel who said: “More than one million fantasy players in Tennessee now know that their right to play fantasy sports is safeguarded and that smart consumer regulations are in place to protect them on all fantasy sites operating in the state.” FanDuel complimented the Governor for taking a detailed and careful approach to the issue and for delivering a real solution for the state.
Some of the features of the new bill include:
- Operators such as DraftKings and FanDuel will need to pay licensing fees of $50,000.
- 6% of the revenue generated by Tennessee residents through these operators will need to be paid back to the state in tax.
- The Tennessee DFS industry will be overseen by the Secretary of State who will implement the law. The Secretary of State will be allowed to establish appropriate fees for the application of licenses and their renewal.
- Players will be limited to depositing with an operator up to $2,500
- Operators will need to segregate their operating funds from player funds.