Last week, Tennessee Governor Bill Haslam signed into law a new fantasy sports regulatory framework governing fantasy sports contests and its operators. The breadth of the new law promises to usher in the most comprehensive regulatory regime that the fantasy sports industry has seen to date.

What are some key provisions of the new Tennessee fantasy sports regulatory scheme?

The following is a non-exhaustive list of the most notable aspects of the comprehensive fantasy sports regulatory framework:

  • Fees for: (a) license applications; (2) operator licenses; and (3) license renewals;
  • Users must be at least 18 years of age to participate in contests;
  • Operator adherence to strict advertising standards concerning, among others things, potential winnings that may be realized by participating in contests;
  • Operators must allow players to exclude themselves from certain types of contests, as well as allow players to establish self-imposed deposit limits and limits on entry fees per contest;
  • Operators must identify “highly experienced players” on their platforms;
  • Operators must offer beginner contests and ensure that non-beginners are prevented from entering such contests;
  • Operators must limit the number of entries that a single user can submit in a given contest;
  • Prohibition on offering contests that involve high school and college sports;
  • Prohibition on the use of scripts, unless the scripts are made available to all players;
  • Penalties for violations, including license suspension or revocation, and fines of up to $25,000 per violation.

The regulations are set to take effect on July 1, 2016.

The Continued Push to Regulate the Fantasy Sports Industry

Tennessee’s comprehensive fantasy sports regulatory regime follows Massachusetts’ recent enactment of its own framework. In addition to the efforts of these states to formally legalize and regulate fantasy sports, similar announcements have come out of Indiana and Virginia regarding implementation of new rules governing fantasy sports contests and operators. Other legislative initiatives are underway in statehouses across the country including, among others, Wisconsin, Missouri, California and Florida. Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. Accordingly, it is essential that fantasy sports enterprises keep abreast of the developing legal landscape. Operators should regularly review their respective contest platforms, entry fee and prize structures with knowledgeable counsel in order to effectively navigate this rapidly changing regulatory framework.