TN Sports Betting Regulator Ends Litigation With Action 24/7

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TN sports betting

A Wednesday meeting not guaranteed to dive into TN sports betting topics took an unexpected turn into litigation resolution.

Action 24/7 CEO Tina Hodges forwarded a letter received Wednesday night from Tennessee Eduction Lottery General Counsel Alonda McCutcheon that states the matter is over:

“The temporary suspension of Action 24/7’s License, and the disciplinary action undertaken by any of the Board, the [Sports Wagering Council], 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.”

Action 24/7 won a temporary injunction against the TEL after the board of directors suspended its TN sports betting license without following proper procedures.

Action 24/7 committed to maintaining TN sports betting integrity

Hodges told LSR Wednesday afternoon she heard about the approved resolution during the TEL’s board of directors meeting but was not sure exactly what it meant.

In a statement sent with the letter Thursday, Hodges said she was pleased with the outcome:

“We are pleased that this matter is coming to a close. We appreciate our loyal players and friends across the state for their unwavering support. Tennessee is our home. We are proud to be the only locally owned and operated licensed sportsbook.

“We remain committed to working with the TEL Board and the Sports Wagering Council to maintain an environment of compliance and integrity for the Tennessee sports wagering community.”

Board was ambiguous on litigation

The TEL’s Board of Directors meeting eventually moved into the topics from its executive session earlier that day. That included a meeting with TEL outside counsel on “pending litigation,” per chairwoman Susan Lanigan:

“The other was to receive advice and counsel from our outside counsel on pending litigation. All of the board members were there for that, we were all able to ask questions of counsel and listen to their advice.

“So what I’m going to ask now is a motion to approve the resolution of that pending litigation as prescribed by counsel this morning – litigation pending in Davidson County. So can I get a motion to do that?”

The board seemingly voted unanimously, though the TEL’s phone meetings are notoriously difficult to hear. Someone could be heard on an open mic joking about the board holding a “roll-call vote” with three board members on the phone.

An unknown male member of the board weighed in when Lanigan asked for comments before the vote:

“I do believe it is in the organization’s best interest to bring the litigation to a close.”

Lanigan added she was also supportive of the motion before taking the vote.

Recapping Action 24/7 suspension

The TEL suspended Action 24/7’s license just before March Madness. The first-time sportsbook operator self-reported 23 instances of debit card fraud over more than a week-long period.

That led to Lanigan suspending Action 24/7 the day the TEL first found out about the issues on March 18. The full board voted to uphold Lanigan’s suspension the following day.

Action 24/7 quickly filed for an injunction. A temporary injunction eventually was granted for two main reasons: the court ruled Action 24/7 would suffer “immediate and irreparable harm” and the TEL did not follow the proper procedures.

Action seems to be in the clear

There is no active investigation of Action being conducted regarding the sportsbooks’ internal controls. Those controls meet the requirements found in the minimum internal control standards, the letter stated.

Action’s license is now also considered fully effective and in good standing with the TEL.

Five TN sports betting applications pending

The TEL has four sports betting applications that are currently under review.

A fifth, CEO Rebecca Hargrove said, was delivered via multiple boxes Tuesday evening.

Tennessee has seven sports betting operators live right now and recently passed $1 billion in handle in its first six months.

Lanigan leaving TEL

Lanigan also announced her retirement from her position, which was not set to end until June 2024.

Will Carver and John Crosslin were approved as chairman and vice chair, respectively, after Lanigan nominated them.

This does not matter much for Tennessee sports betting in the long run. Gov. Bill Lee is expected to sign SB 588 into law, which will put the Sports Wagering Advisory Committee in charge of betting regulation instead of the TEL.