After recently having their online sports betting license suspended due to recent allegations of money laundering, credit card fraud and identity theft, Tennessee local sportsbook, Action 24/7 has had its online sports betting license reinstated.
Chancery court judge Patricia Head Moskal’s ruling lifted the ban on Action 24/7 to operate. In her ruling on the case, Judge Moskal wrote; “Action 24/7 has clearly shown the likelihood that its rights are being violated and it will suffer immediate and irreparable injury pending a formal judgment.”
In other words, Judge Moskal sees the issue of suspension to trade by the Tennessee Education Lottery Corporation (TELC) as illegal as it failed to comply with its own disciplinary rules, and Action 24/7 was not given an opportunity to defend its actions. Suspending during the March Madness tournament was considered too harsher measure. That being said, Judge Moskal reinforced TELC regulatory position, but seeks the licensing and regulatory board follow its own due processes and procedures rather than short circuiting its disputes settlement.
The judge commended Action 24/7 for freezing the accounts with the suspicious activity and/or potential fraud allegations and for self-reporting the events. She did, however, question why it took several days to report the breaches to the regulator.
Tennessee Action 24/7 argued to the court that its rights were violated by the “immediate suspension,” which it says was based entirely on the TELC investigator’s (Danny DiRienzo) findings of only 3 or 4 of 23 total incident reports. Action 24/7 also pointed out that the investigator acted independently and without consultation of its board members as its charter determines. Action 24/7 argued that TELC “could have received additional facts before making its decision, but opted not to do so.”
Additionally, Action 24/7 attorney E. Steele Clayton IV declared that the online sports betting operator’s “business is being destroyed” as it continued to miss out on NCAAB March Madness Tournament betting action. Clayton said the lottery investigator DiRienzo exaggerated the extent of fraudulent activity by claiming it was possibly in the tens, or even “hundreds of thousands”. Clayton showed official documents indicating that the actual amount was precisely $22 601.
Chief Executive Officer of Action 24/7, Tina Hodges issued a statement directly after Judge Moskal’s finding;
“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. Thank you to our loyal players and friends across the state for your confidence, support and encouragement. We’ll be back in action soon,” she wrote.
Action 24/7 were required to post a $25 000 injunction bond before rebooting their site and accepting wagers once more. It is worthwhile to note that the court ruling is temporary.
Action 24/7 offers Bonuses to Customers as Compensation
Clearly adopting the position that any free publicity is good publicity, Tina Hodges made the proactive decision to offer affected sports bettors a bonus. She went directly to Twitter and made the offer of a $800 deposit match to new and existing Action24/7 customers;
“We were suspended eight days, and that’s a hundred dollars ($800) for every day we were suspended,” she wrote.
It is thought that hundreds of people closed their Action 24/7 accounts including one high-profile bettor who withdrew his initial $5000 deposit to possibly wager elsewhere.
The injunction finding for Tennessee Action 24/7 was considered to be temporary at the time. However, at the time of writing this article, the Action 24/7 online sportsbook and the betting apps in both Android and iOS versions were all live and accepting sports betting wagers as normal.