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Tennessee Sportsbook Action 24/7 Ask For Injunction Following License Suspension

Written by:
Jagajeet Chiba
Published on:
Mar/24/2021

Action 24/7, a local Tennessee sports betting firm, had its license yanked by the state after it was suspected of engaging in credit card fraud. Now the company is fighting in court to get it reinstated.

The Back Story

Action 24/7 is a rare home grown newcomer to the world of legalized US sports betting, with its roots in the Volunteer State.  They were the first to obtain a license in Tennessee despite nobody in the space having heard of them.

The Nashville-based company is led by Tina Hodges, who also owns Advance Financial, an online lending company that operates in 15 states. Action 24/7 is backed by more than 50 investors from throughout the state.  The company's marketing plans included plans to attend tailgate parties once the Covid-19 pandemic has come to an end.

Unlike its larger national competitors, Hodges said Action 24/7 wanted to focus exclusively on Tennessee for the time being.

Due to a controversial 10% hold requirement the state is enforcing, players are subject to a maximum 90% payout. Offshore bookmakers and locals utilizing sportsbook software solutions can certainly exploit this negative aspect of the Tennessee sports betting business model for their own benefit. If an individual wins $500 and only gets paid $450, the odds are good he or she will start looking elsewhere, maybe Bookmaker.eu with its $1600 cash welcome bonus.

The financial solutions business appears to have been incorporated into Action 24/7's sportsbook operation in an effort to get a leg up on the competition.

Though initially denying the two entities were connected, customers at the payday lender’s more than 100 Tennessee locations were able to deposit funds directly into their betting accounts.

"When Tennesseans win big, they want their money fast. As a rookie bookie, I couldn't agree more – Tennesseans should get their money quick and easy," said Hodges late last year. "At Action 24/7, our digital withdrawals only take 15 seconds, and cash withdrawals are in-person and instant. That's why more and more Tennesseans are downloading Action 24/7and using our app. They enjoy receiving same day pay, the flexibility of not being required to use a bank account, and speaking to real Tennesseans at our customer service call center. These innovative practices and local services are what sets Action 24/7 apart from other mega-corporations."  

The Accusations

  • Erik Schelzig at the Tennessee Journal reported that the investigator found a potential money-laundering scheme in which a player would sign up for an account, then deposits would be made from multiple credit card numbers, then the balance on the account would be withdrawn abruptly with little gambling action. 
  • Another website claimed that an employee of Action 247 was assisting in getting players from other states wagering with the site, a violation of the Tennessee regulatory process.
  • A former secret service agent claimed credit card fraud and identity theft was taking place on the app.
  • Rep. Darren Jernigan (D-Nashville) had previously voiced concern that Advance Financial was using Action 24/7 customers' winnings to pay down their debts at the payday lender's business.
  • Immediately following the license suspension, the company claimed the site interuption was the result of maintenance and technical issues.

What's Next

  • Action 24/7 claims it was deprived due process by regulatory agency during what is one of the busiest sports betting periods of the year, March Madness.
  • The company made its arguments in state chancery court Wednesday attempting to gain a temporary injunction of its license suspension handed down by the Tennessee Education Lottery Corporation.
  • From SportsHandle: "Counsel E. Steele Clayton IV presented Tennessee Action 24/7’s claims to Chancellor Patricia Head Moskal, stating the March 18 suspension of its gaming license after self-reported violations to the board came 'without notice and opportunity to be heard'."
  • Clayton further claimed that the TELC can only suspend a license by mandate of the board or by delegating the action to the Sports Wagering Committee, something he says was not done in this instance.
  • 24/7 was told the company must be able to demonstrate it can prevent credit card fraud.
  • Tennessee Assistant Attorney General Lindsay Sisco, representing Tennessee Education Lottery Corporation (TELC) said they acted within board rules and legally pulling the license.
  • The former secret service agent, Danny DiRienzo, testified that “eleven (11) different Action 24/7 user accounts had been accessed from the same electronic device in the prior three (3) days. Expanding that timeframe to the past ninety (90) days, I uncovered with minimal effort that forty-five (45) unique user accounts on the Action 24/7 gaming platform had been accessed from the same electronic device in question.”
  • For its part, Action 24/7 admits that fraudulent transactions resulted in $22,661 of damages based on at least $37,362 deposited into suspicious accounts earlier in the month that the company self-reported one week after discovering the charges.

Like with most payday lenders, Advance Financial receives its fair share of complaints related to high interest rates across Internet review sites, though many of the reviews are positive.

The NCAA Basketball Sweet Sixteen tips off Saturday and it would take a small miracle for Action 24 to get back up and running by then.

- Jagajeet Chiba, Gambling911.com

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