Action 24/7, the Tennessee sportsbook, received an injunction Friday allowing it to resume operations. The sportsbook was suspended by that state’s lottery earlier this month over concerns about the lack of controls in place to protect against credit card fraud and money laundering.
The sportsbook filed a lawsuit this week claiming the Tennessee Education Lottery did not follow its procedures properly to temporarily shut down its operations. On Friday, Chancellor Patricia Head Moskal with the Chancery Court in Nashville-Davidson County ruled the company showed “the likelihood” the lottery violated its rights.
The decision to suspend Action 24/7’s license came at the cusp of the NCAA Tournament, one of the most popular events for sports bettors in the US.
The Nashville Post reported that the sportsbook’s lawyers argued that the suspension caused significant harm and will likely drive customers away from the business. Without an injunction, they claimed the business would not last for long.
Action 24/7 was one of four sports betting operators to launch in November, when the lottery first allowed wagering. However, analysis from gaming consultants Eilers & Krejcik showed BetMGM, DraftKings, and FanDuel – the other three to launch in November – commanded about 97 percent of the state’s market during the first three months of operation.
Since then, the lottery has approved additional operators, including TwinSpires, William Hill, and Wynn Sports.
Action 24/7 released a statement Friday afternoon after the Chancery Court’s ruling.
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,” it read.
Previously, the sportsbook decried the lottery’s actions to suspend its operations as “draconian.”
By Saturday morning, sportsbook President Tina Hodges posted a video on Twitter offering new and existing customers a direct match on deposits of up to $800.
“We were suspended eight days, and that’s a hundred dollars for every day we were suspended,” she said.
Lottery officials did not immediately return a message for comment.
More than a week ago, Tennessee Lottery officials claimed Action 24/7 did not act quickly enough to prevent the processing of fraudulent credit card transactions.
It was not the first alleged misstep for the fledgling operation. Lottery officials claimed the sportsbook allowed more than 40 accounts to be set up by out-of-state bettors, who then used an in-state proxy to place hundreds of bets. That proxy turned out to be a contractor working for Action 24/7. That’s according to information Danny DiRienzo, an investigator for the lottery, gave board members during a special meeting on March 19.
Proxy betting is illegal, as it’s considered to be a violation of the Wire Act.
The sportsbook has also received criticism for its connection to a short-term lending company that Hodges oversees. The lottery in January allowed Advance Financial branches to take cash deposits for Action 24/7 customers. Advance Financial offers loans at up to 279.5 percent interest.
Legislation has been filed in the Tennessee General Assembly to prohibit those kinds of transactions at lending or check cashing facilities.