Tenn. Comp. R. & Regs. 1350-02-.11 - SCHEDULE OF ADMINISTRATIVE FINES

For any violation of the Sports Gaming Act or the Rules, the Council may impose an administrative fine not to exceed $25,000 per violation, after following the notice and hearing requirements of this Chapter. Except as provided in T.C.A. § 4-49-127, the Council may impose fines in accordance with this section.

(1) Violation Classes.

(a) Class A includes those violations involving responsible gaming, fraud, criminal conduct, non-cooperation with Council investigations or audits, failure to report illegal or suspicious conduct, and failure to meet the minimum hold.

(b) Class B includes those violations involving unapproved amateur events or Wagers, financial violations, failure to provide Council staff access to wagering systems, or failure to follow Player payment Rules.

(c) Class C includes those violations involving offering unapproved professional events or Wagers, failure to abide by House Rules or internal controls, or failure to timely respond to Player complaints.

(d) Class D includes those violations involving marketing (not involving responsible gaming) and geolocation.

(2) The Council has assigned the following ranges of fines available depending on the seriousness of the violation.

(a) Level 1 - Letter of warning.

1. Class A and Class B violations are not eligible for Level 1.

2. Class C and Class D violations falling under Level 1 will receive a letter of warning.

(b) Level 2 - $1,000 - $10,000.

(c) Level 3 - $10,000 - $20,000.

(d) Level 4 - $20,000 - $25,000.

(3) Factors for consideration. The Council may consider, but shall not be limited to, the following factors in making a determination on what level to assign to a violation and the amount of the fine to be imposed within the selected level:

(a) For fines in the Level 1 range, the Council may consider whether the violation was the Licensee's or Registrant's first offense, whether the violation was unintentional, whether the violation was self-reported, or other mitigating factors.

(b) For fines in the Level 2 range, the Council may consider whether the violation was unintentional, whether the violation was self-reported, or other mitigating factors.

(c) For fines in the Level 3 range, the Council may consider whether there have been multiple violations by a Licensee or Registrant, and whether or not the violation was intentional or unintentional.

(d) For fines in the Level 4 range, the Council may consider whether there have been multiple violations, whether the violation was self-reported, whether the Licensee or Registrant intentionally circumvented or disregarded regulatory guidance, whether the violation was in clear violation of the public interest, whether the violation targeted vulnerable Persons, and other aggravating factors.

(4) For purposes of this Chapter, a "violation" is any act, failure to act, or omission by a Licensee or Registrant that is prohibited by the Sports Gaming Act or the Rules.

(5) A single act of a Licensee or Registrant that results in the violation of more than one provision of the Sports Gaming Act or the Rules may result in a fine being imposed for each provision of the Sports Gaming Act or the Rules that is violated.

(6) Repeated violations of the same provision of the Sports Gaming Act or of the Rules by a Licensee or Registrant may result in a separate fine for each violation.

(7) Payment of a fine shall not excuse the failure to correct the violation, nor shall it bar further action in accordance with the Rules.

(8) Failure to timely remit a fine may be cause for the Council to suspend a License or Registration until the Licensee or Registrant pays the fine.

(9) Fines against Licensees that accept Wagers from Minors or other Persons ineligible to place Wagers in Tennessee or against Persons unlawfully accepting Wagers from another Person without a License or at a location in violation of the Sports Gaming Act will be imposed in accordance with the administrative fines set forth in T.C.A. § 4-49-127. The Council may also suspend, revoke or refuse to renew a Licensee in violation of this Rule.

(10) The Council shall use funds, if any, collected as a result of fines assessed against Licensees and Registrants, for the development and implementation of programs, materials, and services to provide education and outreach to protect the public interest and to promote the integrity of sports wagering, and to reimburse Council employees for Wagers lost as part of an investigation or audit on behalf of the Council under T.C.A. § 4-49-112(a)(1). The Council shall account for the funds, if any, collected as a result of fines. At the end of the fiscal year, all funds shall remain available for use by the Council for this purpose and must carry forward into each subsequent fiscal year.

Notes

Tenn. Comp. R. & Regs. 1350-02-.11

Emergency rules filed December 22, 2021 to become effective January 1, 2022; effective through June 30, 2022. New rules filed March 22, 2022; effective June 20, 2022. Emergency rules filed June 20, 2023 to become effective July 1, 2023; effective through December 28, 2023. Amendments filed September 15, 2023; effective 12/14/2023.

Authority: T.C.A. §§ 4-49-106, 4-49-112(a)(1), 4-49-115, 4-49-115(f), 4-49-126, 4-49-126(d), 4-49-127, and 4-49-131 and 2023 Tenn. Pub. Acts, Ch. 450.