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.”
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.
