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For years a number of offshore sportsbooks have offered betting on credit to long standing customers, in particular the so-called whales. Local bookies typically operate using this business model.
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When the US Supreme Court opened the floodgates by legalizing sports wagering nationwide in 2018, it was widely believed states would stay clear of the credit option.
Enter Tennessee.
When Tennessee legalized sports betting, they broke new ground by becoming the first state to offer mobile-only wagering. It has no land-based casinos.
Tennessee also is the first state to exend loans to sports bettors.
If lawmakers have their way, that's all going to end.
The Tennessee Education Lottery (TEL) oversees sports gambling in the state. They have permitted deposits to be made to Action 24/7 Sportsbook through loans that were given out by sister company Advance Financial 24/7.
Representative Darren Jernigan has introduced House Bill 824. It bans gamblers from taking loans out with companies that are connected to one another.
Senate bill, TN SB 1029, was introduced on Wednesday by Senator Richard Briggs and essentially has the same objective as House Bill 824.
LegalSportsBetting.com explains the conflict of interest here:
Advance Financial 24/7 issues loans to people in Tennessee. These loans can then be used as a form of a deposit to their Action 24/7 Sportsbook. Any winnings obtained by sports bettors will then be put toward repayment of any outstanding loans.
For those that have loans from the company for other purposes, the idea that they can pay back the business through gambling winnings pushes them toward making bets with their sportsbook in the hopes of trying to pay back their loan.
However, this can put them into even bigger debt should their wagers not payout. In the eyes of lawmakers like Jernigan, the racket that’s taking place by the 24/7 companies is basically legalized loansharking.
Advance Financial has over 100 different locations in Tennessee and the sports wagering application being a mobile one means anyone in the state can access it.
No sports betting firm will be allowed to offer financial services to their players.
- Gilbert Horowitz, Gambling911.com
