Tennessee Lottery Suspends Sportsbook License of Action 24/7 on Fraud, Money Laundering Claims

  • Action 24/7 posted that its site was down for maintenance following Thursday’s suspension
  • Out-of-state bets allegedly placed on Super Bowl LV were in violation of the Federal Wire Act
  • TEL investigator cited deposits into one account ran into “tens of thousands of dollars”
  • Action 24/7 said TEL “took draconian action” just as March Madness tournament was beginning
suspended stamp in red
Action 24/7 has become the first online sportsbook in the US to be suspended after the Tennessee Lottery discovered evidence of credit card fraud and money laundering. [Image: Shutterstock.com]

Update March 26, 2021: Action 24/7 is back in operation after a Nashville judge granted it an injunction to temporarily reinstate its license. The regulatory matter with the Tennessee Education Lottery Corporation remains unresolved.

On March 23, Action 24/7 filed a lawsuit against TEL in an attempt to overturn its license suspension. The suit questions the lottery body’s regulatory process deployed in the suspension order, as well as the debit card fraud allegations.

Sportsbook ordered to cease operations

The Tennessee Education Lottery Corporation (TEL) has indefinitely suspended the license of Tennessee Action 24/7 after an investigation into the locally-owned sportsbook uncovered evidence of money laundering and credit card fraud.

first online sportsbook to be suspended in the US

As a result, Action 24/7 has earned itself the distinction of becoming the first online sportsbook to be suspended in the United States. According to ESPN, the state regulatory body temporarily suspended the sportsbook’s license on March 18, with investigators ordering the company to cease operations that evening.

The sportsbook took to Twitter Thursday night to state its site was down for maintenance. Action 24/7 followed this up Friday saying it had “worked through the night” to get the issue resolved and would “be back soon” via another tweet:

The TEL’s investigation revealed instances of multiple money laundering and credit card violations, including wagers allegedly placed on Super Bowl LV in February 2021 by a proxy for non-Tennessee bettors, which runs contrary to the Federal Wire Act.

Big money involved

Danny DiRienzo, sports gaming investigator at the TEL, listed the allegations against Action 24/7 at the Friday meeting. DiRienzo gave one of the sportsbook’s accounts a special mention, pointing out how it was opened “with a $10 deposit and was immediately followed by 184 attempted deposits from seven different credit or debit cards bearing seven different names.”

DiRienzo told TEL executives on Friday that 124 of the deposits were successful and that: “We’re talking tens of thousands of dollars.”

Back in February 2021, the TEL revealed it had shut 74 wagering accounts and canceled multiple bets on Super Bowl LV because of alleged unlawful activities at two of the Volunteer State’s licensed sportsbooks.

For the NFL’s February 7 showpiece, Action 24/7, BetMGM, DraftKings and FanDuel were the only sportsbooks licensed to operate in Tennessee. DiRienzo named the now suspended sportsbook, which was granted a conditional sports wagering license in October 2020, as one site where the alleged illegal bets on Super Bowl LV transpired.

According to ESPN: “BetMGM has publicly stated that it is not under investigation in Tennessee,” while FanDuel and DraftKings have yet to make a statement on the investigation.

Sportsbook bemoans “draconian action”

TEL has stated Action 24/7 may appeal its sports betting license suspension. Action 24/7 CEO Tina Hodges issued a statement following the TEL’s decision on Friday bemoaning the body’s decision to suspend its license ahead of the NCAA “March Madness” basketball tournaments.

“The Board relied upon unfounded fears of future speculative recurrences of the activity, and took draconian action just as the NCAA Tournament is beginning,” Hodges’ statement read in part.

The Action 24/7 CEO added that her firm would continue to work with the TEL in order to “have the suspension lifted quickly so that the people of Tennessee may continue to enjoy wagering on the Action 24/7 sportsbook.”