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Tennessee regulators will consider new rules for sports betting next month that include unique requirements for operators using influencers to promote their products.
The state’s Sports Wagering Council is set to hold a rulemaking hearing on January 15 to consider a host of proposed changes to the state’s regulations for online sports betting.
Among the most notable additions to the rules is a provision that would require operators to disclose agreements with individuals who serve as “a brand ambassador, social media influencer, or in a similar role, as determined in the sole discretion of the council”.
For those who meet that definition, licensed operators must disclose the identity of the endorser, the amount and form of compensation, and a general description of the service to be performed by the individual.
The state currently has a similar provision in place that requires operators to disclose that information when a licensee has an agreement with an athlete who is eligible to participate in events that can be wagered on.
Although some states have toyed with standards regarding product endorsers or influencers, none go so far as to require specific details regarding compensation.
For example, Massachusetts has standards requiring advertisements to disclose whether a financial relationship exists between any person providing an endorsement and the licensed operator, and prohibits compensating an endorser in promotional credits.
Beyond U.S. borders, the Alcohol and Gaming Commission of Ontario enacted standards last year that prohibit using athletes or any celebrity or influencer who “would likely be expected to appeal to minors” from appearing in advertising for sportsbooks.
In addition to the new influencer language, the new rules make a few additional changes, many of which are cleaning up or rewording certain provisions.
One clarification is that operators may accept pre-match wagers on proposition bets involving collegiate teams, but may not accept in-play proposition bets on college sports. Propositions involving individual collegiate athletes remain prohibited in the state.
The new rules would also follow suit with several other states in requiring multi-factor authentication checks 14 days after the most recent authentication, as well as before other account functions such as making a withdrawal or adding a debit card.
Although sports betting was legalized in Tennessee in 2019, the state has seen a significant amount of regulatory upheaval in that time.
Sports betting was initially regulated by the Tennessee Lottery, with the then Sports Wagering Advisory Council created to advise the lottery on policy.
In 2021, however, the legislature voted to shift sports-betting regulation to the council. In 2023, lawmakers changed the state’s tax structure from a 20 percent tax on revenue to a 1.85 percent tax on handle, making it the only state in the U.S. to tax on handle rather than revenue.
