ZenSports, a sports betting operator in Tennessee, has come under scrutiny for a recent regulatory fine and allegedly limiting a high-stakes bettor.

The operator received a $60,000 fine in May from the Tennessee Sports Wagering Council (SWC), the Tennessee sports betting regulator, for having insufficient funds in the reserve account needed to cover winning bets. It was stated during the May SWC meeting that ZenSports had an insufficiency of hundreds of thousands of dollars in its cash reserves.

ZenSports launched in Tennessee in June 2023, and it expects to check all of its necessary financial boxes moving forward.

“We added staff to our finance area, and now they’re manually reviewing on a daily basis … regrettably, we didn’t have that in place,” ZenSports chief compliance officer Eddie Ponce said at the SWC’s May meeting. “We’ve reinvested more into that area, and we’re incredibly confident it will not happen again, so I can assure you, you will not be seeing us on this issue in the future.”

In part due to those concerns, ZenSports’ sports betting operator license was only renewed on a conditional basis in June. The betting app needs to go through an audit with the SWC in the coming months as part of conditional approval.

“You had a couple strikes today,” SWC chairman Billy Orgel said at the May meeting.

“We’re not looking for a third,” Ponce said.

A recent report from The Center Square increased scrutiny around ZenSports’ operation. The article details the experience of one bettor, Felix Baum.

The report says Baum was offered a lucrative sign-up offer, which he accepted. Baum says he went on to consistently wager tens of thousands of dollars per bet on the platform, only to experience unusual activity when requesting to withdraw funds.

Baum claims his request didn’t immediately process, and he was then contacted by the betting platform’s chief operating officer, who encouraged Baum to keep his money in his account. Ultimately, Baum says he received his funds but was then limited to much smaller wagers on the betting app.

The practice of limiting bettors isn’t novel, as other betting apps regularly limit winning bettors. The practice has even attracted the notice of the Massachusetts Gaming Commission, which is in the early stages of taking a close look at the topic.

An operator’s COO reaching out to a bettor encouraging them to keep wagering and not make a full withdrawal, however, is more unusual. Baum also said ZenSports sent the tax form for his winnings late, which led to him having to refile his taxes.

Sports Handle reached out to ZenSports about The Center Square’s story, but the operator didn’t share comment prior to the time of publication.