3 finalists chosen for sports gaming executive director
The Sports Wagering Advisory Council has narrowed the field of more than 45 applicants to become the panel’s first executive director to three finalists.
The hiring committee decided the final three from a list of about 10 who had made the first cut. Council member Mike Kenney, who headed the search, declined to publicly name the three finalists because they hadn’t yet been informed of their status.
The Council is being spun out from the Tennessee Eduction Lottery Corp. on Jan. 1 following the passage of a new state law earlier this year.
Lottery: Disciplinary action against Action 24/7 is ‘null and void’
The Tennessee Education Lottery Corp. has written a letter declaring its unprecedented suspension of the Action 24/7 sports gaming license to be “null and void.”
The letter comes after a judge in April reversed the Lottery board’s decision to halt all betting with Action 24/7 after it self-reported instances of debit card fraud on its platform. The sportsbook is run by executives of short-term loan company Advance Financial.
The letter acknowledges Action 24/7 has proper internal controls and that there is no active investigation being conducted into its practices. Action 24/7’s license is unrestricted, and it can freely transact with vendors and parties, according to the letter.
“The temporary suspension of Action 24/7’s License, and the disciplinary action undertaken… related to the allegations presented by the TEL Staff to the Board at the Board’s March 19, 2021 meeting, are null and void,” the letter says.
Read the whole letter here:
May 12, 2021
RE: Status of the Sports Gaming Operator License of Tennessee Action 24/7, LLC
To whom it may concern:
This letter concerns the status of the Sports Gaming Operator License (“License”) of Tennessee Action 24/7, LLC (“Action 24/7”). On March 18, 2021, Action 24/7’s License was temporarily suspended on the basis of alleged deficiencies involving Action 24/7 internal controls. On March 19, 2021, at an emergency meeting of the TEL Board (“Board”), the Board ratified the temporary suspension of Action 24/7’s License. On March 26, 2021, the Chancery Court of Davidson County, Tennessee, ordered TEL to reinstate Action 24/7’s License, and TEL reinstated Action 24/7’s License that same day.
By this letter, the Board, the Spo1is Wagering Committee of the Board (“SWC”), and the TEL Staff hereby represent and confirm that, as of the date of this letter:
1. There is currently no active investigation of Action 24/7 being conducted by any of the Board, the SWC, or the TEL Staff regarding the allegations presented by the TEL Staff to the Board at the Board’s March 19, 2021 meeting or the adequacy of Action 24/7’s internal controls.
2. Action 24/7’s internal controls and Action 24/7’s implementation thereof meet the requirements found in the Minimum Internal Control Standards.
3. Action 24/7’s License is fully effective; there are no restrictions on Action 24/7’s License; and Action 24/7 is in good standing with TEL.
4. The temporary suspension of Action 24/7’s License, and the disciplinary action undertaken by any of the Board, the SWC, or the TEL Staff related to the allegations presented by the TEL Staff to the Board at the Board’s March 19, 2021 meeting, are null and void.
5. Action 24/7 is entitled to the full use and benefits of its License, including, but not limited to, the ability to freely transact with other TEL licensees and vendors or other parties.
Sincerely,
/signed/
Alonda W. McCutcheon
Executive Vice President & General Counsel
Newly approved sportsbook appears to be allowing banned bets
When Tennessee lawmakers were debating the state’s new sports betting bill in 2019, a late change to help ensure its passage was to eliminate the possibility of proposition bets on college players.
William Hill, one of the most recent sportsbooks approved to operate in the state by the Tennessee Lottery, doesn’t appear to have gotten the message. As of Monday evening, the gaming outfit was taking bets on how individual players would do in the NCAA tournament.
The Lottery’s oversight of the new gaming program has come under scrutiny after the body suspended the Tennessee Action 24/7 sportsbook due to fraudulent debit card activity on the its platform. A Nashville judge late last week threw out the suspension, ruling the Lottery hadn’t gone through the proper procedures. The sportsbook run by executives of short-term lender Advance Financial had self-reported the fraudulent deposits and withdrawals and its lawyers called a Lottery investigator’s claims about the scope of the problems to be vastly exaggerated.
Approved sportsbooks each pay an annual licensing fee of $750,000, but the Lottery has had trouble with keeping the sports betting oversight staffed . Danielle Boyd recently announced he was resigning as vice president of sports gaming after about nine months on the job. The Lottery’s first gaming director, Jennifer Roberts, left after a seven-month tenure in 2020.
UPDATE: A comment from Lottery spokesman David Smith:
There’s a process in place for violations, and we will follow that process. This matter is under review, however, prop bets on college players are not permitted. The operator has taken those down, and any wagers placed have been voided by the operator.”
Read the ruling unfreezing betting on the Action 24/7 sportsbook
Nashville Chancellor Patricia Head Moskal on Friday lifted the state Lottery’s suspension of sportsbook Action 24/7 due to fraudulent activity on its platform.
“We applaud the Court’s decision and look forward to working with state officials to ensure public safety and trust in our regulatory system while maintaining an environment for businesses to thrive in Tennessee,” Action 24/7 president Tina Hodges said in a statement. “Thank you to our loyal players and friends across the state for your confidence, support and encouragement. We’ll be Back in Action soon!”
The ruling sends the case back for further hearings before the Lottery.
“We will continue to work with Action 247 to implement appropriate minimum internal control standards that protect the public interest and minimize risk to the integrity of sports gaming in Tennessee,” Lottery spokesman David Smith said in a statement.
Here is the order for Chancellor Moskal:
Continue readingORDER ON TEMPORARY INJUNCTION
This matter came before the Court for hearing on March 24, 2021, by videoconference, on Plaintiff Tennessee Action 24/7, LLC’s (“Action 24/7”) Emergency Motion for Temporary Injunction, seeking reinstatement of Plaintiffs sports gaming operator’s license temporarily suspended by Defendants Tennessee Education Lottery Corporation and members of its Board of Directors and President and CEO, in their official capacities (collectively, “TEL”). Participating in the hearing were Attorney E. Steele Clayton IV, Sarah B. Miller, and Nicholas J. Goldin, representing Action 24/7, and Assistant Attorney General Lindsay H. Sisco, Deputy Attorney General Justin Urban, and Assistant Attorney General Jonathan Shirley, representing Defendants. Also attending were Tina Hodges, Action 24/7’s President, and Andrew Jack, Action 24/7’s Chief Operating Officer.
Action 24/7 filed a Verified Complaint, with exhibits, against Defendants on March 22, 2021, seeking judicial review of Defendants’ action indefinitely suspending Plaintiffs sports gaming operator’s license under Tenn. Code Ann. § 4-51-328. Plaintiff contemporaneously filed an Emergency Motion for Temporary Injunction supported by a Memorandum of Law. The Court entered an Order setting the Motion for a temporary injunction hearing on March 24, 2021 at 2:00 p.m./central, pursuant to Rule 65.04 of the Tennessee Rules of Civil Procedure and Davidson County Local Rules of Practice § 19.03. See March 22, 2021 Order. Defendants filed a response in opposition to the Motion, with exhibits, on March 24, 2021.
I. FINDINGS OF FACT
The Court makes the following preliminary findings of fact for purposes of the pending request for a temporary injunction, only, based upon the Court’s record at this early stage of the proceedings.
As of November 1, 2020, Tennessee residents are allowed to place online sports wagers under the recently enacted Tennessee Sports Gaming Act (the “Act”). Tenn. Code Ann. § 4-51- 301, et seq. Action 24/7 is licensed by the State of Tennessee ·as an online sports wagering business under the Act. The Act authorizes the Tennessee Education Lottery Board of Directors (the “TEL Board”) to enforce and supervise compliance with the provisions of the Act. Id.,§ 4-51-306. The Act au-thorizes the TEL Board to control the licensing of sports wagering operators in Tennessee. Id., § 4-51-317, -326. The Act also authorizes the TEL Board to promulgate rules in accordance with the Act. Id., § 4-51-306. Further, the TEL Board is authorized to “investigate and conduct a hearing with respect to a licensee” that has violated the Act, in accordance with rules adopted by the TEL Board. Id.,§ 4-51-326(a). Upon finding a violation of the Act or rule, the TEL Board may suspend, revoke or refuse to renew a license for violations.of any provision of the Act or rules
promulgated by the Board. Id., 4-51-326(b).The Board promulgated rules and regulations under the Act, referred to as “Chapter 15 – Sports Gaming Rules, Regulations and Standards” (“Rules”). The Rules recognize a “Sports Wagering Committee” of the TEL Board. The Rules, in tum, authorize the Sports Wagering Committee to suspend, revoke, or not renew a license for any of the reasons set forth under the Act or the Rules, upon recommendation by the CEO. Rule 15.2.3.A. The Rules grant the Sports Wagering Committee the discretion to revoke, suspend or not renew a license when it determines it is “in the best interests of the TEL, its Board, or the public policy or welfare of the State of Tennessee,” after notice and a right to a hearing in accordance with the Act and the Rules. Rule 15.2.3.B. The Rules additionally authorize the Sports Wagering Committee, or its designee, to suspend a license upon “exigent circumstances without prior notice pending any prosecution, hearing or investigation.” Rule 15.2.3.B. The Rules do not describe or provide for the size or composition of the Sports Wagering Committee, and do not specifically define what constitutes “exigent circumstances.”
Tennessee sportsbook sues to undo suspension by Lottery
Tennessee Action 24/7 is asking a court to undo a first-in-the-nation decision by the state Lottery to suspend its sportsbook license due to fraud and money laundering, the Associated Press reports.
Action 24/7, which is run by executives of short-term lender Advance Financial, is questioning the regulatory process used to issue the suspension.
According to Lottery investigator Danny DiRienzo, the company self-reported suspicious activity on March 17, which was several days after the alleged fraud took place. In one instance, he said, a player made a $10 deposit into his betting account, which was then followed by 124 deposits with seven cards in as many different names. The account holder then withdrew money without placing many bets.
“It is serious, serious criminal activity, probably in the tens if not hundreds of thousands of dollars worth of damages done with multiple real individuals and business victims,” DiRienzo said during an emergency meeting of the Lottery board on Friday.
According to the the lawsuit, company representatives wanted to be heard during the meeting, but the panel “refused to hear their position.”
The lottery’s actions were “an inadequate or sometimes complete lack of review of the evidence, an unwillingness to hear Action’s side of the story, and a rush to judgment, ultimately resulting in a destruction of Action’s business,” according to the lawsuit.
Tennessee Action said the total number of fraudulent deposits totaled about $37,400, of $14,700 has been recovered.
$27M in online wagers placed in first week of Tennessee sports gaming
Bettors placed $27 million worth of wagers in the first week after the launch of only sports gambling in Tennessee.
Tennessee Lottery head Rebecca Hargrove said Monday that sportsbooks paid out $23.9 million, leaving them with an adjusted gross income of $2.5 million for the period covering Nov. 1 through Nov. 8. The state’s tax on that amount totaled $509,000.
Of those tax collections, 80% will be deposited into the Lottery’s education account, 15% goes to cities and counties on a per-capita basis, and 5% is dedicated to gambling addiction treatment programs within the state Department of Mental Health.
Most of the betting action has focused on football, with 60% of wagers placed on the NFL and 40% on college games.
Four sportsbooks are operational in Tennessee: BetMGM, DraftKings, FanDuel, and Tennessee Action 24/7. Hargrove said three more are in the process of applying and hoping to get up and running by the end of the year: Churchill Downs, William Hill, and WIN Interactive.
One minute past midnight: Online sports gambling kicks off in Tennessee on Sunday
Tennessee’s sports gaming program goes live at 12:01 a.m. on Sunday. The state has approved four sportsbooks to begin taking online wagers within state boundaries: BetMGM, DraftKings, FanDuel, and Tennessee Action 24/7.
Here’s a release from the Tennessee Lottery detailing the final approval:
NASHVILLE—The Tennessee Education Lottery (TEL) today announced final approval for online sports betting in Tennessee to begin on Sunday, November 1, at 12:01 a.m. Central Time.
At that time, authorized licensees can begin taking wagers from customers at least 21 years old and physically located in Tennessee at the time the wager is placed.
All four operators are close to being ready to launch Sunday. Three have completed all requirements to launch. The fourth is currently in the field for system testing, which is scheduled to be completed tomorrow, October 31.
“This Sunday will represent the culmination of an enormous amount of work and due diligence to bring online-only sports wagering to Tennessee, the only state in the nation to do so,” TEL President and CEO Rebecca Paul Hargrove said. “As the regulator, today also represents the beginning of a new stage as we establish and support a responsible and competitive program here. We will continue to work with all licensees, registrants and applicants to protect the consumer, promote fairness in sports and regulate this new Tennessee industry that provides critical funds to the state and local governments.”
Tennessee state law permits wagering on sporting events via the internet, mobile device or other telecommunications platforms. The TEL is responsible for the licensing and regulation of online sports wagering in Tennessee.
The TEL serves as the regulator of sports wagering in Tennessee and does not serve as an operator, in accordance with the law.
Speakers seek delay of sports gambling in Tennessee amid questions about draft rules
Senate Speaker Randy McNally and House Speaker Cameron Sexton await Gov. Bill Lee’s arrival for his second State of the State address in Nashville on Feb. 3, 2020. (Erik Schelzig, Tennessee Journal)
Legislative leaders want the Tennessee Lottery to delay the approval of sports gambling rules. Senate Speaker Randy McNally (R-Oak Ridge) and House Speaker Cameron Sexton (R-Crossville) wrote in a letter to Lottery Chair Susan Lanigan on Friday that some of the draft rules are outside the scope of the gaming law passed last year.
Here is the text of the letter:
Dear Ms. Lanigan,
We would respectfully request that the Tennessee Education Lottery Corporation Board of Directors and the Sports Wagering Advisory Council delay voting on the rules to implement the “Tennessee Sports Gaming Act.”There have been concerns brought to our attention that some of the rules, as drafted, may be outside the authority given to the Board or Council pursuant to the “Tennessee Sports Gaming Act.” For example, there is concern that the additional categories of licenses created within the rules aren’t within the scope or authority of the Board or Council under the “Tennessee Sports Gaming Act.” Specifically, the Sports Pool Intermediary License and the Vendor License, and associated fees, are not authorized in the Act.
Please feel free to contact our office with any questions you have regarding this letter,
Thank you for your consideration.
Sincerely,/signed/
Lt. Governor Randy McNally, Speaker Cameron Sexton
Bipartisan bill would restrict TN lottery advertising
News release from Rep. Andy Holt
NASHVILLE, Feb. 8, 2017– On Wednesday, Tennessee State Rep. Andy Holt (R-Dresden) introduced legislation that targets, what he calls, predatory marketing tactics from the Tennessee Lottery.
“Last month, I raised concern over the way lottery commercials were being used in predatory ways to target Tennessee’s most economically vulnerable citizens by encouraging them to purchase lottery tickets rather than life sustaining goods such as food,” says Holt. “I have, very publicly, asked the Tennessee Lottery to ensure me (and the countless Tennesseans who are upset over these practices) that they would no longer run these types of ads. When the media asked them for comment, they had nothing to say, and they’ve said nothing to me. So, now we’re introducing bi-partisan legislation to put an end to these damaging ads.”
(Note: It’s HB633, though apparently a caption bill subject to change later.)
Holt notes research that highlights the fact that these ads target economically disadvantaged and minorities, which he says is shameful.
Continue reading
