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
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.
Tennessee sports betting jumps 17% in January
About $211 million in sports bets were placed in Tennessee in January, a 17% increase from the previous month. Payouts were $190 million.
The state’s tax haul was $4.3 million, bringing the total to $9.7 million through the first three months since gaming went live in November.
Preliminary figures show $15 million worth of bets were placed on the Super Bowl, though final numbers won’t be available until the February numbers are released late this month.
For the first three months of gaming, Tennessee sportsbooks have taken $524 million in bets and paid out $476 million. While the law requires payouts to be no more than 90 cents on every dollar wagered, sportsbooks have been averaging closer to a 9% hold.
Here are the monthly betting numbers to date:
| November | December | January | |
| Wagers | $131 million | $181 million | $211 million |
| Payouts | $118 million | $168 million | $190 million |
| Privilege Tax | $2.4 million | $3.1 million | $4.3 million |
