Tennessee Judge: Action 24/7 Hearing On Fraud Failings Cannot Happen

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Action 24/7

The Tennessee Education Lottery continues to get an education of its own after its short-lived suspension of Action 24/7.

The TEL Board of Directors cannot hold a hearing concerning the multiple incidents of fraud that took place on Action 24/7 and went unreported for days, the Davison County Chancery Court ruled. The Tennessee Star first reported the news.

Holding a hearing on the matter would violate the court’s temporary injunction handed down last month. The court ruled in favor of Action 24/7 at that time as the sportsbook faced “immediate and irreparable harm.” The TEL also did not follow the correct procedures leading up to the suspension.

Since the Board of Directors ruled its vote to uphold a temporary suspension on Action’s TN sportsbook license was a “final action” in the matter, the board lacks jurisdiction based on its own rules to hold another hearing, the court found.

The TEL did not respond to a request for comment.

A recap of Action 24/7 suspension

It was just under a month ago that the TEL handed the first US sportsbook license suspension to Action 24/7.

The trouble began much earlier, however:

TEL tried to hold meeting once injunction was granted

TEL General Counsel Alonda McCutcheon reached out to Action the same day the temporary injunction was granted.

McCutcheon told the sportsbook and its attorneys the TEL’s Sports Wagering Committee would hold a meeting April 7 to “consider suspension of Action 24/7’s license for failure to maintain adequate internal controls sufficient to detect and to prevent unusual, suspicious or illegal wagering activity.”

Action would have had the chance to speak at that meeting. It requested the chance to talk during the last meeting when the license suspension was upheld.

Action’s counsel pushed back, which prompted an email from James Urban of the attorney general’s office. Urban noted the court’s ruling said the injunction “does not enjoin Defendants from their ongoing duties to regulate and supervise Action 24/7.”

Action’s counsel said it continued its objection to the hearing and would seek clarification from the court.

Action CEO Tina Hodges submitted a declaration to the court April 5. She stated there had been no additional cases of fraud since the incidents that were reported March 17.

What happens now Action now?

The TEL might have botched its ability to properly punish a sportsbook despite Action’s surprising lack of internal controls.

There are still some outstanding issues that need to be addressed, however.

The TEL hasn’t addressed the issue of Action marketing to its customers with a suspended account. It also hasn’t taken any action against the sportsbook for a serious issue of proxy betting that occurred right before the Super Bowl.

A contracted employee of Action 24/7 created more than 40 accounts for out-of-state bettors. Those accounts then placed hundreds of bets.

“[The issue] was immediately turned over to law enforcement, and any action on our part is pending the outcome of that investigation,” the TEL told LSR.