Tennessee regulator issues US$100,000 fine to illegal betting platforms

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2025/07/16: Tennessee sports betting regulator issues US$250,000 in fines to offshore operators 2025/05/20: Tennessee Sports Wagering Council fines online sportsbook US$50,000 2025/12/01: Prediction markets could threaten Tennessee’s sports betting revenue, official says 2025/05/23: Wyoming regulator issues illegal igaming warning

The Backstory

Why the fines matter now

Tennessee’s latest penalties against two offshore sportsbooks land at a strategic moment for the nation’s largest online-only sports betting market. State officials have said December brings a seasonal uptick in responsible gambling usage among legal operators’ customers, sharpening the contrast with unlicensed sites that offer no consumer protections. The fines underscore a broader campaign to push illegal books out of the state and protect a tax base that has helped fund education programs. They also show a regulator asserting its authority amid new competitive pressures from emerging products that sit outside traditional sports wagering rules.

The Sports Wagering Council has steadily ratcheted up enforcement this year, and the newest actions build on a series of fines and market exits. Regulators are pairing monetary penalties with cease-and-desist orders and public warnings to steer bettors away from offshore platforms that do not follow state law. The approach is drawing support from other agencies and private platforms that can limit exposure, such as removing promotional channels tied to unlicensed operators.

A crackdown that expanded through 2024

Tennessee’s campaign has progressed case by case. In the spring, the council fined several offshore books — BetUS, MyBookie and Xbet — and then escalated when one operator kept taking Tennessee bets after a warning. The regulator detailed that action in May when it levied a $50,000 penalty against BUSR for ignoring a March cease-and-desist order, part of a broader push that had lifted total fines to $250,000 at the time. The regulator framed the issue as basic consumer protection, urging BUSR users to withdraw funds and stressing that unlicensed sites do not offer the safeguards required of state-approved sportsbooks. Read the council’s rationale in its notice on the $50,000 fine to BUSR.

By late summer and fall, the effort had widened. In one sweep, the council announced $250,000 in fines across five offshore operators based in Costa Rica, Panama and Curacao, which it said were violating the Tennessee Sports Gaming Act by accepting bets without a license. That action brought total penalties to $600,000 and coincided with Bovada’s decision to leave Tennessee after receiving a $50,000 fine in October. The regulator said it was working with law enforcement to “eliminate these bad actors.” See the list of sanctioned books and the agency’s reasoning in its enforcement update on $250,000 in fines to five offshore operators.

The ongoing drumbeat of actions has helped push several brands out of the market, while signaling to bettors that the state will pursue repeat violators. It also laid the groundwork for the latest penalties and the message attached to them: legal sportsbooks are required to provide responsible gaming tools; illegal operators are not.

Revenue pressures from prediction markets

Behind the enforcement push is a fiscal story. Tennessee has generated more than $19 billion in handle since launch and $345 million in tax revenue that funds education grants and building upgrades, including private school vouchers. Officials worry that a fast-growing corner of finance — prediction markets — could siphon off activity without contributing taxes. Platforms regulated by federal commodities rules allow users to trade contracts on sports outcomes peer to peer, skirting sports betting statutes.

In a fall briefing, Executive Director Mary Beth Thomas pointed to the surge in volume, citing one platform’s reported $1 billion in weekly trading in October, largely tied to sports. The American Gaming Association has estimated states with legal sports wagering may have lost over $151 million in tax revenue to these products nationally. Tennessee has pressed federal regulators to block sports-related contracts, arguing they conflict with state law and threaten funding for programs already under budget strain. For a detailed look at the state’s concerns and the legal crosscurrents, see the analysis of how prediction markets could threaten Tennessee’s sports betting revenue.

The timing of Tennessee’s latest enforcement message — during a peak period for legal operators’ responsible gambling tools — also speaks to this competition. State officials are signaling that if wagering migrates to platforms outside their purview, both consumer protections and tax collections could erode.

Exits, deterrence and consumer warnings

Tennessee’s approach has combined penalties with visible outcomes. Several offshore books have left the market following fines or warnings, and the council has spotlighted those exits to reinforce deterrence. The regulator’s posture is that unlicensed operators capture customer deposits and data without accountability — and that bettors may have limited recourse when disputes arise.

The state’s messaging has mirrored steps in other jurisdictions. For example, Wyoming’s top gaming official issued a consumer alert that no online casino or sweepstakes site is licensed there, warning that some offshore sites even use fake in-state addresses. The commission emphasized it cannot assist in disputes with illegal platforms. The warning reflects how regulators are trying to cut through confusing branding or look-alike websites to keep consumers in vetted environments. Read the Wyoming notice on the illegal igaming warning.

A broader regulatory playbook takes shape

While Tennessee focuses on unlicensed operators, other regulators are tightening rules on the licensed market. Ontario’s gambling watchdog recently fined BetMGM Canada CA$110,000, saying the operator is responsible for third-party affiliates that used cash inducements to drive sign-ups, which is banned under provincial standards. The action underlines a theme across North America: regulators are raising expectations for both legal compliance and marketing conduct, holding brands accountable for vendor behavior and customer acquisition strategies. Details of the case are outlined in the AGCO’s penalty notice to BetMGM Canada.

The practical effect is a two-front effort: push illegal operators out while ensuring licensed ones meet higher bars on advertising, responsible gambling and data safeguards. For bettors, that means a clearer split between regulated sites that face audits and penalties and unlicensed ones that do not.

What’s at stake next

As football season drives wagering and year-end tax tallies near, Tennessee’s regulator is trying to keep handle and revenue in the legal ecosystem. With billions in annual bets and education funding on the line, enforcement is likely to continue in tandem with outreach to major platforms and tech companies that can limit offshore operators’ reach.

Key questions ahead: whether more offshore brands leave the state as fines accumulate; how federal regulators treat sports-related prediction contracts; and whether Tennessee’s education funding model, dependent on sportsbook taxes, needs a legislative hedge if volumes shift. The council’s recent cadence — fines, cease-and-desist letters and public advisories — suggests further actions are coming, along with pressure on intermediaries that distribute or monetize offshore content.

For now, the state’s message is consistent: legal sportsbooks must comply with consumer protection rules and responsible gambling standards; illegal operators will face escalating penalties and public exposure. The next test will be whether that combination keeps bettors — and tax dollars — on licensed platforms as new, untaxed alternatives vie for attention.