Action 24/7 No Longer Facing Legal Headache From Tennessee Betting Regulator

  • The TEL has decided to no longer pursue any legal action against Action 24/7
  • Action 24/7 is not facing an active investigation into its internal controls
  • The TEL suspended the operator’s license before March Madness over cases of debit card fraud
  • Action 24/7 is one of seven online sportsbooks to launch so far in Tennessee
neon signs on Broadway Street in Nashville
The Tennessee Education Lottery (TEL) has dropped its legal action against Tennessee sports betting operator Action 24/7. [Image:]

No more issues

Action 24/7 can rest easy after the Tennessee Education Lottery (TEL) said that it will no longer be pursuing legal action against the sports betting operator. Action 24/7 received a letter on Wednesday from TEL General Counsel Alonda McCutcheon.

This letter outlined how “the temporary suspension of Action 24/7’s License, and the disciplinary action undertaken by any of the Board, the Sports Wagering Council, or the TEL Staff” relating to allegations made at a TEL board meeting on March 19 are now null and void.  

Action 24/7 will not face any further investigation of its internal controls

The TEL board of directors appeared to unanimously agree to bring the litigation to an end during its Wednesday meeting. All of the board members had attended a meeting with outside counsel regarding advice on the best way to proceed. Action 24/7 will not face any further investigation of its internal controls as it is now meeting minimum standards.

The operator had already successfully gotten a temporary injunction against its suspension by the TEL board of directors as they had not followed the appropriate procedures. Action 24/7 CEO Tina Hodges welcomed the news that the matter is now at an end, saying that her company can now focus on its operations as the only sportsbook that is “locally owned and operated.”

TEL chairwoman Susan Lanigan has also announced that she will be retiring from her role, despite her term not ending until June 2024. The new chair and vice-chair were appointed at the recent meeting.

Reason for the initial suspension

It was right before the beginning of the March Madness college basketball tournament that the TEL announced the suspension of Action 24/7’s state license. This was the first time that a sports betting operator in the US regulated market had its license suspended.

The operator had self-reported 23 different incidents of debit card fraud that took place in the span of just over a week. TEL chairwoman Susan Lanigan suspended the license on March 18 after learning about the incidents. The next day, the full TEL board of directors voted to uphold the suspension.

Action 24/7 then filed for an injunction to restore its license, which the court eventually awarded because of the “immediate and irreparable harm” the operator would suffer from the continuing suspension, as well as the failure of the TEL to properly follow procedures. Its license is now fully restored after the TEL’s decision this week.

Action 24/7 also previously had issues when it was discovered that an employee helped over 40 bettors place illegal bets across state lines. There were also concerns about people using payday loans for gambling purposes. People were reportedly able to get high-interest loans from Action 24/7’s sister company Advance Financial and then make in-branch cash deposits to their sports betting accounts.

Sports betting in Tennessee

Tennessee is the sole state that has only legalized online sports betting and does not allow retail operations. Since the launch of the sector in November 2020, seven sportsbooks have gotten up and running. The TEL is also currently reviewing applications from five other operators.

the fastest that a state has managed to get past the $1bn handle mark

For the first six months of legal sports betting in Tennessee, total handle was almost $1.1bn. This is the fastest that a state has managed to get past the $1bn handle mark. The previous record belonged to New Jersey, which achieved the milestone in seven months. Through its 20% tax rate, Tennessee has earned over $18.3m in sports betting tax revenue to date.

It does not look like the TEL will be in charge of regulating the sports betting sector for much longer. Governor Bill Lee will reportedly soon sign legislation that will appoint the Sports Wagering Advisory Committee as the sector’s regulator. Those in favor of the bill believe that the TEL would be better off just focusing on regulating the state lottery.

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