Tenn. Comp. R. & Regs. 1350-01-.02

Current through December 18, 2024
Section 1350-01-.02 - DEFINITIONS

As used in this Chapter, and other Chapters promulgated by the Council, unless the context otherwise requires:

(1) "ACH" means Automated Clearing House, which is a network that connects all banking and financial institutions within the United States.
(2) "AML" means anti-money laundering.
(3) "Applicant" means an individual, group of individuals, or entity that applies for a License or Vendor Registration.
(4) "Bettor," "Patron," or "Player" means a Person who is:
(a) Twenty-one (21) years of age or older;
(b) Physically present in the state of Tennessee when placing a Wager;
(c) Not prohibited from placing a Wager under the Sports Gaming Act, T.C.A. § 4-49-112; and
(d) Not a Prohibited Participant.
(5) "Board" or "TEL Board" means Board of Directors of the Tennessee Education Lottery Corporation.
(6) "Bond" means a bond held in escrow for the purpose of maintaining adequate reserves to account for losses suffered by a Licensee and owed to Bettors and which cannot be released without consent of the Council.
(7) "Cancelled Wager" means a Wager that was legal and appropriate when originally placed by the Bettor, but some event, circumstance or occurrence prevents the Wager from being unequivocally determined in accordance with the Licensee's approved House Rules or Internal Control Standards.
(8) "Cash Basis" means an accounting method whereby Wagers are recognized during the period they are placed, and where the date of the event being Wagered upon is irrelevant.
(9) "Cashless Wagering System" or "CWS" means a host system whereby a Player maintains an electronic account on the host database that allows play through the use of a combination of two or more of the following for login: username, password, or personal identification number (PIN).
(10) "Cheating" means, inter alia, improving the chances of winning or of altering the outcome of a Wager, Sports Gaming System, or Sporting Event by deception, interference, or manipulation or use of Material Non-Public Information or through use of any equipment, including software pertaining to or used in relation to the equipment, used for or in connection with a Wager, Sports Gaming System, or the Sporting Event on which Wagers are placed or are invited, including attempts and conspiracy to cheat.
(11) "Council" means Tennessee Sports Wagering Council.
(12) "Event Number" means a set of alpha and/or numeric characters that correspond to a Sporting Event or an Event ancillary to a Sporting Event.
(13) "Executive Director" means the individual hired by the Council to serve as Executive Director, as provided by T.C.A. § 4-49-105(a), to direct and oversee the day-to-day operations and management of sports gaming on behalf of the Council under the Sports Gaming Act and the Council's Rules.
(14) "Federal Excise Tax" means the net taxes upon Wagers paid to the United States Treasury by Licensees for Wagering transactions authorized by Tennessee law.
(15) "Geolocation Service" means a technology service used by an Operator to identify real-world geographic location(s) of an Internet or mobile connected remote wagering device, application or website.
(16) "Global Risk Management" means management, consultation, instruction, or transmission of information relating to Interactive Sports Gaming by a Licensee or Registrant who also holds a license to conduct sports gaming in another Permissible Jurisdiction. The term includes: the management of risks associated with Interactive Sports Gaming involving a Sporting Event or any other Event for which a Wager may be accepted; the setting or changing of Bets or Wagers, cutoff times for Bets or Wagers, acceptance or rejection of Bets or Wagers, pooling or laying off of Bets or Wagers, lines, point spreads, odds or other activity relating to Betting or Wagering.
(17) "Good Standing" means that an individual or entity is currently in compliance with the provisions of the Sports Gaming Act and these Rules, and has not, during the preceding six-month period of Licensure or Registration, been assessed an administrative fine or civil penalty by the Council, or been subject to the revocation, suspension, or nonrenewal of its License or Registration by the Council.
(18) "Gross Handle" means the total amount of Gross Wagers less Cancelled or Voided Wagers received by the Licensee over a specified period of time.
(19) "Gross Wager" means
(A) all cash and Promotional Wagers received by Licensees from Bettors as Wagers; and
(B) includes all Wagers placed with cash, cash equivalents, promotional items, and all other media by which a Bettor is allowed to place a Wager.
(20) "Immediately" shall mean 48 hours or less, regardless of whether that 48-hour time period falls within a business day.
(21) "Immediately Notify" or "Immediately Report" means to notify or report to the Executive Director within 48 hours of a Licensee or Registrant becoming aware of an event, circumstance, action or omission that gives rise to a duty to immediately notify or report to the Council under the Sports Gaming Act or these Rules.
(22) "Independent Testing Laboratory" means an impartial entity that conducts testing and analysis of an Operator's Sports Gaming System to assess its compliance with applicable standards and requirements as specified by these Rules.
(23) "Institutional Investor" means
(a) a bank as defined in Section 3(a)(6) of the Federal Securities Exchange Act;
(b) an insurance company as defined in Section 2(a)(17) of the Investment Company Act of 1940, as amended;
(c) an investment company registered under Section 8 of the Investment Company Act of 1940, as amended;
(d) an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, as amended;
(e) collective trust funds as defined in Section 3(c)(11) of the Investment Company Act of 1940, amended;
(f) an employee benefit plan or pension fund that is subject to the Employee Retirement Income Security Act of 1974, as amended, excluding an employee benefit plan or pension fund sponsored by a publicly traded corporation affiliated with a Licensee;
(g) a state or federal government pension plan;
(h) a group comprised entirely of Persons specified in (a) through (g); or
(i) such other Persons as the Council may determine for reasons consistent with the public policies of the State of Tennessee.
(24) "Integrity Monitoring Provider" means an independent third party that assists Licensees with the identification and reporting of Unusual or Suspicious Wagering activity.
(25) "Integrity Monitoring System" means a system of policies and procedures approved by the Council through which a Licensee identifies and reports Unusual or Suspicious activity.
(26) "Interactive Sports Gaming" means placing a Wager on a Sporting Event via the Internet, on a mobile device, or other telecommunications platform.
(27) "Internal Control Standards" mean the internal procedures, administration, and accounting controls designed by the Licensee to conduct sports gaming operations.
(28) "Key Personnel" means individuals who have the power to exercise Significant Influence Over Sports Wagering in this state and who are associated with the Applicant for Licensure or Registration as:
(a) A principal owner of more than five percent (5%) of the Applicant;
(b) A partner of the Applicant, voting member on the board of directors of the Applicant, or an officer of the Applicant, as those terms are defined in title 48 or 61, as applicable; or
(c) An employee of the Applicant who principally oversees wagering activity, risk management, platform management, or integrity monitoring.
(29) "Know Your Customer" or "KYC" means a software or service that is used to verify the validity of a Patron's age and identity.
(30) "Layoff Wager" means a Wager placed by a Sports Gaming Operator with another Sports Gaming Operator for the purpose of offsetting Player Wagers.
(31) "License" means the authority to engage in Interactive Sports Gaming operations granted by the TEL prior to January 1, 2022; or the Council, pursuant to the Sports Gaming Act under T.C.A. § 4-49-117.
(32) "Licensee" means a Sports Gaming Operator approved by the TEL prior to January 1, 2022, or the Council, and operating pursuant to a License granted by the Council or the TEL under T.C.A. § 4-49-117.
(33) "Material Non-Public Information" means information that has not been disseminated publicly concerning an athlete, contestant, prospective contestant, or athletic team, including, without limitation, confidential or non-public information related to the availability or plans for an athlete, team or contestant to participate in a Sporting Event, medical conditions or treatment, physical or mental health or conditioning, physical therapy or recovery, discipline, sanctions, academic status, education records, eligibility, playbooks, signals, schemes, techniques, game plans, practices, strategies, assessments, systems, drills, or recordings of practices or other athletic activities.
(34) "MICS" means the Minimum Internal Control Standards established by the Council, pursuant to T.C.A. § 4-49-110.
(35) "Minor" means a Person who is less than twenty-one (21) years of age.
(36) "Mobile Applications" means any interactive platform for use through the Internet or other telecommunications platform, accessed via a mobile device, or computer, which has been approved by the Council for operation of Interactive Sports Gaming by a Sports Gaming Operator.
(37) "Money Line Wager" means a Wager on the outcome of a Sporting Event outright, with fixed odds in relation to the dollar amount wagered.
(38) "Multi-Factor Authentication" means an authentication procedure that uses two or more of the following factors to verify a Player's identity:
(a) Something known only to the Player (e.g., static password, personal identification number, or answers to challenge questions);
(b) Something possessed only by the Player (e.g., digital or physical security token or onetime password provided to the Player);
(c) Something inherent to the Player (e.g., the Player's biometric data, such as fingerprint or facial recognition); or
(d) Any other factors approved by the Council.
(39) "Obvious Error" means either a human or technical error that results in a Licensee offering Wagers at terms, prices, or odds that are materially different from the general market or clearly incorrect given the chance of the event happening at the time the Wager was accepted.
(40) "Odds-making" means the calculation, setting or adjustment of odds on the outcome of a Sporting Event or any component thereof.
(41) "Official League Data" means statistics, results, outcomes, and other data related to a Sporting Event obtained pursuant to an agreement between the Sports Gaming Operator and the relevant governing body of a sport or sports league, organization, or association whose corporate headquarters are based in the United States, or an entity expressly authorized by such governing body to provide such information to Licensees for purposes of live betting.
(42) "Online Sports Wagering Platform Software" means an integrated software system utilized by a Licensee to conduct its online sports wagering operations and through which sports wagering transactions occur.
(43) "Parlay Wager" means a single wager that incorporates two (2) or more individual Bets for purposes of earning a higher payout if each Bet incorporated within the Wager wins.
(44) "Patron Account Management Services or Software" or "PAM" means a technology service used by a Licensee to create, manage, and track a Patron's online Sports Gaming Account and history.
(45) "Patron Session" means a period of time when a Player is logged on to a Sports Gaming System.
(46) "Payment Processing Service" means a third-party technology system or software used to verify, facilitate, or authorize payment transactions, including any transfer of funds to or from Players.
(47) "Permissible Jurisdiction" means any jurisdiction in which Global Risk Management or the Betting or Wagering on a Sporting Event is lawful or not otherwise expressly prohibited under the laws of that jurisdiction.
(48) "Person" means an individual, group of individuals, trust, or business entity.
(49) "Personally Identifiable Information (PII)" means any information connected to a Player that can be used to uncover the Player's identity, including, but not limited to, a Player's SSN, name, date of birth, email address, residential address, or phone number.
(50) "Prohibited Participant" means any individual:
(1) who is prohibited from wagering pursuant to the Sports Gaming Act, T.C.A. § 4-49-112;
(2) who is on any self-exclusion list or Council exclusion list;
(3) whose participation may undermine the integrity of the wagering or the Sporting Event;
(4) who is excluded from wagering for any other good cause; or
(5) any Person who makes or attempts to make a Wager as an agent or proxy on behalf of another.
(51) "Prohibited Wager" means an attempted or placed Wager on any Sporting Event or occurrence which is not permitted under the Sports Gaming Act or that the Council (and formerly the TEL Board while its Rules were in effect) has prohibited by Rule.
(52) "Promotional Credit" means free plays, deposit matches, odds boosts, risk-free Bets, and any other bonus that a Sports Wagering Operator offers or gives to a Player as an incentive to Wager.
(53) "Promotional Payout" means a payout by a Licensee to a Bettor in a form that cannot be immediately withdrawn by the Bettor as cash.
(54) "Promotional Wager" means a Wager placed by a Licensee using a bonus or other non-cash item.
(55) "Proposition Wager" means a Wager made regarding the occurrence or nonoccurrence of an event or circumstance during a Sporting Event that is not the final outcome of the Sporting Event. A Proposition Wager does not include the final outcome of the Sporting Event.
(56) "Registrant" means a Person who holds a registration issued under T.C.A. § 4-49-131.
(57) "Registration" means approval from the Council to serve as a Vendor for Interactive Sports Gaming in the State of Tennessee, or, prior to January 1, 2022, approval from the TEL to serve as a Supplier or Vendor, as those terms were defined in any previous Rules of the TEL.
(58) "Resettled Wager" means a Wager that was originally settled incorrectly by a Licensee due to a statistical correction, technical error, or human error.
(59) "Responsible Gaming Plan" means a Licensee's policies, procedures, and processes for responsibly conducting Interactive Sports Gaming in the State of Tennessee.
(60) "Risk Management" means the management of risks associated with Wagering, including but not limited to a combination of one or more of the following: the setting or changing of odds, cutoff times for Wagers, acceptance or rejection of Wagers, laying off of Wagers, and other similar activity relating to Wagering.
(61) "Significant Influence Over Sports Wagering" means the authority to make decisions regarding the daily operations of a Licensee or Registrant in Tennessee related to Wagering activity, Risk Management, Platform Management, Integrity Monitoring, or other similar essential functions related to sports Wagering, as determined in the sole discretion of the Council.
(62) "Sporting Event" or "Event" means any professional sporting or athletic event, including motorsports and e-sports, any collegiate sporting or athletic event, or Olympic sporting or athletic event sanctioned by a national or international organization or association, as authorized by the Council pursuant to these Rules. Sporting Event does not include horse-racing.
(63) "Sportsbook Risk Management or Odds-making Services" means the services used by a Licensee to identify, assess, and limit the risks associated with sports betting operations, including Odds-making Services used by a Licensee to accurately price wagering markets and to avoid overexposure to a particular Sporting Event outcome.
(64) "Sports Data Feed" or "Sports Data Software" means a technology system or software that provides statistical information used by Operators related to the various aspects of Sporting Events. Sports data may include, but is not limited to, scores, player and team performance metrics, game outcomes, player profiles, and historical records.
(65) "Sports Gaming Account" means an account established by a Licensee for an individual Patron to use for Interactive Sports Gaming.
(66) "Sports Gaming Act" means the Tennessee Sports Gaming Act, originally codified at T.C.A. §§ 4-51-301, et seq., as amended from time to time. Pursuant to Pub. Ch. 593 (2021), the provisions of the Sports Gaming Act are transferred to T.C.A. §§ 4-49-101, et seq., effective January 1, 2022.
(67) "Sports Gaming Operator" means a Licensee authorized under the Sports Gaming Act and these Rules to offer and operate Interactive Sports Gaming.
(68) "Sports Gaming System" means any combination of hardware, software, data networks, and communications used to manage, administer, or control sports wagering that comprise the system used for the purpose of offering Interactive Sports Gaming by electronic means, including, but not limited to Mobile Applications or Internet sites accessed via a mobile device or computer.
(69) "Sports Gaming System Operational Assessment" means an assessment performed by an independent testing laboratory that assesses the Sports Gaming System's compliance with the Sports Gaming System Requirements set forth in these Rules.
(70) "Sports Gaming System Technology Integrity and Security Assessment" means an assessment performed by an independent testing laboratory that assesses the Sports Gaming Systems technological integrity and security requirements set forth in these Rules.
(71) "Suspicious Wagering Activity" means wagering activity in violation of the Sports Gaming Act or these Rules; that is made or attempted to be made by an agent or proxy (i.e., messenger betting); or that is indicative of match-fixing, the manipulation of an event, misuse of inside information, sports corruption, or other prohibited activity.
(72) "TEL" means the Tennessee Education Lottery Corporation.
(73) "Ticket" means a printed record issued, or an electronic record maintained, by the Sports Gaming System that evidences a Wager.
(74) "Unusual Wagering Activity" means abnormal wagering activity exhibited by Players and deemed by a Licensee or the Council as a potential indicator of Suspicious Wagering Activity. Unusual Wagering Activity may include, but is not limited to, the size of a Player's Wager or increased wagering volume on a particular Event or Wager type.
(75) "Vendor" means a person who:
(a) Provides one (1) or more of the following:
1. Geolocation Services;
2. Online Sports Wagering Platform Software;
3. Patron Account Management services/software;
4. Sportsbook Risk Management or Odds-making services or software;
5. Sports Data Feeds or Software, including Official League Data feeds and software;
6. "Know Your Customer" or "KYC" software or services; or
7. Payment Processing Services;
(b) Serves as an Independent Testing Laboratory to assess interactive sports wagering platforms, integrity, or security;
(c) Has direct interface or interaction with patron accounts or interactive sports wagering platforms, as determined by the Council;
(d) Receives payment or compensation based on a revenue sharing agreement in which the Vendor receives a percentage of the adjusted gross income of the Licensee; or
(e) Provides similar services that are material to conducting interactive sports wagering, as determined by the Council; and
(f) "Vendor" does not include marketing affiliates who are compensated by a method other than a revenue sharing agreement.
(76) "Voided Wager" means a Wager that a Licensee voids after acceptance because the Wager is determined by the Licensee, the Council, or the Executive Director to be prohibited under the Tennessee Sports Gaming Act, rules promulgated by the Council, other state laws, or prohibited or otherwise invalid pursuant to the Licensee's approved House Rules or Internal Control Standards.
(77) "Voucher" means a printed wagering instrument, or digital representation thereof, used in a Cashless Wagering System that has a fixed dollar wagering value and is redeemable for cash or cash equivalents as approved by the Council.
(78) "Wager" or "Bet" means a sum of money or thing of value that is risked by a Bettor on the unknown outcome of one (1) or more Sporting Events, including, but not limited to, the form of fixed-odds betting, a future bet, live betting, a money line bet, pari-mutuel betting, parlay bet, pools, proposition bets, spread bet, or in any other form or manner as authorized by Rule of the Council. Wager or Bet shall exclude any sum of money or thing of value risked on an unknown outcome pursuant to the Fantasy Sports Act, T.C.A. §§ 4-49-201, et seq.
(79) "Written Notice" means delivery by mail, overnight courier service, or e-mail.

Tenn. Comp. R. & Regs. 1350-01-.02

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. §§ 4-49-101, 4-49-102, 4-49-104, 4-49-105, 4-49-106, 4-49-110, 4-49-112, 4-49-115, 4-49-115(f), 4-49-131, and 4-49-201; 2019 Tenn. Pub. Acts, Ch. 507; 2021 Tenn. Pub. Acts, Ch. 593; 2023 Tenn. Pub. Acts, Ch. 143; and 2023 Tenn. Pub. Acts, Ch. 450.