Online sportsbook Tennessee Action 24/7 was suspended by state regulators last Friday on suspicion of money laundering and fraud.
Lottery investigator Danny Di Rienzo from the Tennessee Education Lottery’s Sports Wagering Advisory Council told the regulating body that traces of money laundering and fraud were found on Tennessee Action 24/7’s betting app. Action 24/7 is the only Tennessee-based sportsbook in the state.
Various Issues Found at Tennessee Action 24/7 Mobile App
Di Rienzo detailed the allegations, highlighting one Action 24/7 account which was opened with a $10 balance but was deposited successfully 124 times from seven different credit cards. According to Di Rienzo, there was little betting action on the account yet multiple withdrawals worth tens of thousands of dollars were made to the account after the deposits.
The former secret service officer also identified Action 24/7 as one of the Tennessee sportsbooks which accepted illegal bets related to Super Bowl LVI. A total of 41 out of state residents placed a proxy bet through an individual in Tennessee on Action 24/7’s website to circumvent geolocation requirements of being present in Tennessee to place legal Tennessee sports bets.
Action 24/7 Says it Curbed the Illegal Activity
Tennessee Action 24/7 co-founder Tina Hodges admitted to the suspicious activity at its betting app. However, Hodges said that an Action 24/7 employee discovered the scheme and the company immediately suspended the player accounts. Hodges added that Action 24/7 has instituted additional control measures to curb such illegal activities and none has has happened since that isolated incident. The company says that it will appeal the suspension.
Action 24/7 was founded by Advance Financial executives. Although the lending company initially said that the two businesses are not linked, they secured permission earlier this year to allow customers at Advance Financial’s over 100 Tennessee locations to deposit funds to their betting accounts. However, a bipartisan bill currently in the General Assembly is looking to prohibit deposits made at the payday lender for fears that the company is using Action 24/7 winnings to pay off debts at Advance Financial.
The online-only Tennessee sports betting industry just got bigger last week with the addition of two more online gambling operators.
In an announcement made last Friday, the Tennessee Lottery’s Sports Wagering Committee has approved licenses for two more Tennessee sports betting online operators, bringing the total number of online sports betting options in the Volunteer state to seven.
Lottery CEO Rebecca Hargrove revealed that Willian Hill and Wynn Sports have been granted permission by the Commission to commence Tennessee sports betting activities. However, Hargrove added that the two new players and Churchill Downs won’t have their sportsbooks live when the NFL plays it championship game next weekend at Super Bowl LV. DraftKings, FanDuel, BetMGM, and Tennessee Action 24/7 are the four sportsbooks ready to accept Super Bowl bets in the Volunteer State.
Affected by Christmas Day Explosion
A reason why one of the new Tennessee sports betting company won’t be able to go live on February 7th is the fact that its server was affected by the Christmas Day explosion in Nashville. The blast injured a dozen people and saw several buildings damaged. While the operator was not identified, the issue with its Nashville server isn’t expected to be resolved in time for SuperBowl Sunday.
Meanwhile, Churchill Downs received approval in early January. It will operate under a BetAmerica sportsbook that is being rebranded as TwinSpires but the company has not set a launch date. WynnBET Tennessee has likewise not announced when it will go live while William Hill is expected to commence operations next month.
$180M December Handle
Tennessee passed the United States’ first online-only legal sports betting law in 2019 with Republican Governor Bill Lee allowing the bill to pass without his signature. The law took effect that summer with the Lottery tasked to administer Tennessee sports betting. Online sports betting began last November for people 21 and over who are physically in the boundaries of the Volunteer state.
Last Tuesday, the Tennessee Lottery reported a December 2020 betting handle of $180.9M which represented a 37.7% increase from the state’s $131.4M haul in its debut month last November. Gross payouts in December were recorded at $167M which was a significant 41% increase from the previous month’s $118.2M. The state received a privilege tax of $3.1M for December 2020, a 29.2% increase from November’s $2.4M figures.