(1) Sports Gaming System Operational Assessment.
(a) Licensee shall, prior to commencing operations and annually thereafter, prior to renewal, obtain a Sports Gaming System Operational Assessment, demonstrating that its Sports Gaming System meets the standards set forth in these Rules. The Sports Gaming System must be reviewed, tested, and certified by a recognized Independent Testing Laboratory that is registered as a Vendor. The Independent Testing Laboratory’s Sports Gaming System Operational Assessment must be submitted to the Council and shall, at a minimum, include the following:
- 1. An assessment of the Sports Gaming System’s compliance with Rules 1350-01- .03(4), 1350-01-.03(7), 1350-01-.06(7)(a)1. through 5., 1350-01-.07(8)(a), 1350- 01-.07(8)(c), 1350-01-.07(8)(d), 1350-01-.07(16)(a),1350-01-.08(2), 1350-01- .08(3)(a)1. through 7., 1350-01-.08(3)(b)1. through 5., 1350-01-.08(4)(a) through (c), 1350-01-.08(5), 1350-01-.08(8), 1350-01-.08(9)(a) through (e), 1350-01- .08(10)(a) through (f), 1350-01-.08(13), 1350-01-.08(14), 1350-01-.08(17), 1350- 01-.08(18), 1350-01-.08(19), 1350-01-.08(20)(a), 1350-01-.08(20)(d)2. and 3., 1350-01-.08(21)(a) through (e), 1350-01-.08(22)(a) through (d), 1350-01- .15(1)(b)1. through 6., 1350-01-.15(1)(c), 1350-01-.15(1)(d)1. through 13., 1350- 01-.15(1)(e)1. through 6., 1350-01-.15(1)(f)1. through 4., 1350-01-.15(1)(g)1. through 4., 1350-01-.15(1)(i), 1350-01-.15(1)(j)1.(i) through (v), 1350-03-.03(3)(a) through (h), 1350-03-.11(1), 1350-03-.11(2)(a) and (b), 1350-03-.11(4)(a) through (d), 1350-03-.12(1) through (6), 1350-03-.12(8), 1350-03-.12(13)(a) through (g), 1350-03-.12(14)(a) through (d), 1350-03-.12(15)(a) through (c), 1350-03- .12(15)(e) through (h), and 1350-03-.13.
- 2. Name and company affiliation of the individuals who conducted the assessment;
- 3. Date of assessment;
- 4. Findings with regard to compliance with the Sports Gaming System requirements set forth in these Rules;
- 5. Recommended corrective action, if any; and
- 6. The Applicant’s response to the findings and recommended corrective action, including a timeline for any corrective action.
(b) A Sports Gaming System must address, at a minimum, the following functions:
- 1. Wagering management;
- 2. Sports Gaming Account management;
- 3. Location requirements for placing Wagers;
- 4. Verification of all system, data, software-related components and time synchronization;
- 5. Ability to report and detect abnormal betting patterns and Unusual Wagering Activity, Suspicious Wagering Activity, or illegal Wagering activity; and
- 6. Preventing the acceptance of Wagers from Prohibited Participants.
- (c) A Sports Gaming System shall maintain all transactional wagering data for a period of five (5) years.
(d) A Sports Gaming System shall record and store the following information for each Wager made, and be capable of transmitting it to the Council upon request:
- 1. Description of Event;
- 2. Event Number;
- 3. Wager selection;
- 4. Type of Wager;
- 5. Amount of Wager;
- 6. Date and time of Wager;
- 7. Unique Wager identifier(s);
- 8. User ID;
- 9. Current Wager status (i.e., active, cancelled, unredeemed, pending, etc.);
- 10. Relevant location information, including the internet protocol address if applicable;
- 11. The results of the Wager;
- 12. Amount won; and
- 13. Date and time winning Wager was paid to Player.
(e) A Sports Gaming System that issues and/or redeems a Promotional Credit shall record the following information:
- 1. Amount of Promotional Credit;
- 2. Date, time, and method of issuance;
- 3. Unique Promotional Credit identifier;
- 4. Expiration period for the Promotional Credit;
- 5. User ID assigned to the Promotional Credit; and
- 6. Date, time, and method of redemption of Promotional Credit, if applicable.
(f) A Sports Gaming System that offers live betting shall be capable of the following:
- 1. The accurate and timely update of odds for live betting Wagers;
- 2. The ability to notify the Player of any change in odds that is not beneficial to the Player after a Wager is attempted;
- 3. The ability for the Players to confirm the Wager after notification of the odds change; and
- 4. The ability to freeze or suspend the offering of Wagers when necessary.
(g) When a Wager is Voided or Cancelled, the Licensee shall make an entry in the Sports Gaming System indicating the void or cancellation.
- 1. In the event that a Licensee voids or cancels a Wager pursuant to these Rules prior to the outcome of the Event being known, the Licensee shall report the Wagering data on a monthly basis as part of the privilege tax submission in accordance with Rule 1350-01-.07(6).
- 2. In the event that a Wager is placed after the outcome of the Event is known, the Licensee shall void the Wager, but must Immediately Notify the Executive Director. A Licensee shall only void such a Wager upon review and approval by Key Personnel or his or her designee.
- 3. In the event that a Licensee wants to void a Wager for any reason other than Obvious Error after the outcome of the Event is known, if the Wager was placed before the outcome of the Event is known, the Licensee shall void the Wager, but must Immediately Notify the Executive Director. A Licensee shall only void such a Wager upon review and approval by Key Personnel or his or her designee.
- 4. In the event that a Licensee wants to void a Wager due to Obvious Error after the outcome of the Event is known, if the Wager was placed before the outcome of the Event is known, the Licensee must first obtain prior approval from the Executive Director. When requesting approval to void such a Wager, the Licensee shall provide the following information, in the form and manner required by the Council:
- (i) A detailed explanation regarding why the error constitutes an Obvious Error, including comparable market offerings, as applicable;
- (ii) A root cause analysis of the error, including a plan to prevent the same error from occurring again; and
(iii) A Wager transaction report on the impacted market.
- 5. In the event that a Licensee voids a Wager due to an indication of Suspicious Wagering Activity, the Licensee must Immediately Notify the Executive Director.
- (h) A Sports Gaming System shall be capable of verifying that all components of the Sports Gaming System are the authentic, approved versions used to offer, record, and process Wagers to ensure there have been no unauthorized modifications. The Sports Gaming System must be able to detect if any system component is determined to be invalid in the event of an authentication failure.
- (i) A Sports Gaming System shall have controls in place to review the accuracy and timeliness of any data feeds used to offer or settle Wagers. In the event that an incident or error occurs that results in a loss of communication with data feeds used to offer or redeem wagers, such error shall be recorded in a log capturing the date and time of the error, the nature of the error, and a description of its impact on the system’s performance. Such information shall be maintained for a minimum period of two (2) years.
(j) The Sports Gaming System shall provide the Council with access to Wagering systems, transactions, and related data as deemed necessary by the Council, in the manner required by the Council. This access shall include but is not limited to the following:
- 1. The ability to query the Sports Gaming System and view the following information:
- (i) Patron liability by account;
- (ii) Active future Wagers;
- (iii) Voided and Cancelled Wagering activity;
- (iv) Suspicious Wagering Activity; and
- (v) Deposit information (including type of payment accepted).
- (k) A Sports Gaming System shall provide a mechanism for the Council to query and export all Sports Gaming System data in the manner required by the Council.
(2) Sports Gaming System Technology Integrity and Security Assessment
(a) Licensee shall, prior to commencing operations and annually thereafter, prior to renewal, obtain a Sports Gaming System Technology Integrity and Security Assessment conducted by a recognized Independent Testing Laboratory that is registered as a Vendor. The Independent Testing Laboratory’s Sports Gaming System Technology Integrity and Security Assessment must be submitted to the Council and shall, at a minimum, include the following:
- 1. A vulnerability assessment of the Sports Gaming System’s internal and external network infrastructure, to identify vulnerabilities of all devices, platforms, and applications connected to or present on its networks;
- 2. A penetration test of the Sports Gaming System’s internal and external network infrastructure to confirm if identified vulnerabilities of all devices, platforms, and applications are susceptible to compromise;
- 3. An assessment of the Sports Gaming System’s compliance with Rules 1350-01- .15(1)(h), 1350-03-.03(1) and (2), 1350-03-.03(4) and (5), 1350-03-.12(9), 1350- 03-.12(10), and 1350-03-.12(11);
- 4. Name and company affiliation of the individual(s) who conducted the assessment;
- 5. Date of assessment;
- 6. Findings related to technological integrity and security in accordance with these Rules;
- 7. Recommended corrective action, if applicable; and
- 8. The Licensee’s response to the findings and recommended corrective action, including a timeline for any corrective action.
Authority: T.C.A. §§ 4-49-106 and 4-49-115(f). Administrative History: New rule filed April 1, 2025; effective June 30, 2025.