Action 24/7, the only U.S. sportsbook to launch backed by a payday lender, has taken its final bet.
The Tennessee-only sportsbook shut down earlier this month. Founder Tina Hodges claimed no one can make money in sports betting, though multiple companies operating successful sportsbooks across the country might dispute that.
“Despite our very best efforts and dedication, the current landscape for state-licensed online sports gambling in the United States has proven to be unviable and unprofitable for all operators in the industry,” Hodges said in a release quoted by the Nashville Post.
The sportsbook said it will honor all outstanding bets.
Action 24/7 received first US suspension
The Action 24/7 brand is well known within the industry, but not for its sports betting business.
Despite Tennessee restricting betting to online only, Action 24/7 was permitted to accept player cash deposits to fund sports betting accounts at Advance Financial 24/7 locations.
In March 2021, it became the first US sportsbook to have its license suspended, after events raised concerns about internal controls. Action 24/7 self-reported the findings of 23 accounts that likely had fraudulent activity.
The first incident reviewed by the Tennessee Education Lottery’s investigator showed an account with 184 attempted deposits from seven different credit cards under seven different names, none matching the account holder. Tens of thousands of dollars were deposited in 124 successful transactions only to be withdrawn shortly after.
“If the minimal internal control standard had been met or implemented by Action 24/7, if they had implemented the internal controls that they represented to the TEL that they had in place prior to launch, this very activity would have been stopped very early on,” the investigator said. “And we would have many less victims and far less of a dollar amount in losses.”
The proceedings against Action 24/7 were eventually dropped after the Davison County Chancery Court ruled the regulator botched the entire process.
Failed legislative effort to block betting/loan connection
Tennessee Rep. Darren Jernigan said he was concerned the TEL allowed cash deposits at Advance Financial 24/7 locations. He and Sen. Richard Briggs filed legislation in 2021 to make it illegal for people to bet with a company while they have outstanding loans with an affiliated company.
“Really, it is the literal definition of loan sharking,” Jernigan said. “I take a 279% interest and then gamble with it. The only difference is you don’t get your legs broken the next day, you go into a cycle of debt that ends up in bankruptcy.”
The bill was withdrawn after lawmakers raised concerns it was “too broad,” following lobbying from Action 24/7. It was not refiled.
