Dispute Over Tennessee's Authentic Sports Data Surfaces, Potentially Affecting Decisions Nationwide
In the volatile world of sports betting, Tennessee is about to make waves with a potential change in its relationship between operators, data providers, and professional sports leagues. Two contenders, SuperBook Sports and Betly, have asked the Tennessee sports betting regulator for permission to use unofficial league data for NFL wagering before the state regulator's March 1 meeting.
This issue has been passed to the Tennessee legislature, who have since proposed bills (SB 475 and HB 1362) geared towards abolishing the state's official league data mandate. HB 1362 is currently on the legislative session's backburner, but there's still a chance for a discussion before it ends on May 4. meanwhile, SB 475 is scheduled for a hearing in the Senate Finance, Ways, and Means Committee on a Tuesday.
The Tennessee Sports Wagering Advisory Council is keeping cool as a cucumber on the request from SuperBook and Betly, as they defer to the legislature to sort out the official league data issue.
One industry insider predicts that the discussion about eliminating the official league data mandate will gain momentum in Tennessee. SuperBook and Betly would certainly be thrilled if these bills become law soon.
Tennessee: The Teams that Break the Mold
A handful of other states also have some form of official league data requirement, such as Arizona, Illinois, Kansas, Massachusetts, Michigan, New York, and Virginia. However, Tennessee's mandate is a tougher cookie to crack. Arizona and New York have regulations that include language about official league data requirements, while other states incorporate the rule in their sports betting statutes.
Tennessee's sink-or-swim mandate, though, doesn't need the league to actually request the use of official data. Sports betting operators in Tennessee are obligated to partner with Genius Sports for NFL official league data, and the cost of this arrangement is reportedly a burden for SuperBook and Betly.
The obstacle is that Tennessee's law didn't include clear language about how to determine whether the terms of the agreement were "commercially reasonable." States with official league data requirements often use the phrase "commercially reasonable" or "commercially unreasonable," but the specifics of what these phrases mean are often unclear.
Most operators receive official league data through national contracts with data providers. Heavyweights like DraftKings and FanDuel, for instance, form national deals to use the data across multiple states where they operate. For these powerhouses, it's just another cost of doing business. For smaller operators operating in a few states, though, this cost is a heavier load.
Non-official league data feeds could leave smaller operators in the dust when it comes to live betting, as official feeds are considered the fastest. Even a delay of a few seconds can be crucial for updating in-game odds, according to one industry consultant.
"In a nutshell, it's the difference between being able to offer a reasonably competitive live betting product and being completely left in the dust," the consultant declared.
The Fat Lady's Yet to Sing
With Tennessee, things could go either way. If the state eliminates the official league data mandate, it might just be a trend that catches on in other states. Given the value of official league data feeds for live betting and other purposes, though, they're not going anywhere anytime soon. Major players like Caesars Sportsbook, DraftKings, and FanDuel have official partnerships with the NFL, and these agreements mean the sportsbooks will continue to use official league data.
The decision in Tennessee could have implications for states planning to offer legal betting in the future. When crafting a wagering bill, avoiding an official league data mandate could help create a more robust sports betting market, as it would be easier for smaller operators to join the fray.
Regardless of what happens, Tennessee is the hot topic of the legislative season. The state's unusual tax rule is already causing a stir, and the elimination of the official league data mandate could just be another unique rule in Tennessee's playbook.
"There are a lot of industry stakeholders from all angles—regulatory, operators, providers—that are going to keep a close eye on this," the consultant concludes.
Sports betting operators SuperBook Sports and Betly have sought permission from the Tennessee sports betting regulator to use unofficial league data for NFL wagering, potentially marking a shift in the state's relationship with professional sports leagues. This request is part of a larger movement, with legislative bills (SB 475 and HB 1362) proposed to abolish the state's official league data mandate.
In the volatile sports betting landscape, the cost of using official league data, as required by Tennessee's law, has been a significant burden for some operators. The absence of clear guidelines for determining whether the terms of the agreements are commercially reasonable adds to the challenge.
If successful, the elimination of the official league data mandate in Tennessee could set a precedent for other states. This change might foster a more competitive sports betting market by reducing barriers for smaller operators.
However, the future of sports betting in Tennessee remains uncertain, with the legislative process ongoing. The Tennessee Sports Wagering Advisory Council is deferring decisions to the legislature, while industry stakeholders closely monitor the developments.
