Jan 18, 2020; Nashville, Tennessee, USA; Tennessee Volunteers logo on a fans jacket prior to the game against the Vanderbilt Commodores at Memorial Gymnasium. Mandatory Credit: Jim Brown-USA TODAY Sports

First US sportsbook suspension handed out in Tennessee

Action 24/7 made some unwanted history last week after it became the first legal US sportsbook to be suspended by regulators in Tennessee.

The Tennessee Education Lottery announced the suspension of Action 24/7’s sports betting license due to multiple cases of suspected credit card fraud and money laundering from multiple accounts.

How did first US sportsbook suspension happen?

The suspension was delivered on Thursday, March 18 and upheld the next day after a vote by the Tennessee Education Lottery board. The full board voted to uphold and maintain the temporary suspension except for John Crosslin who had to abstain because the company is a client of one of his business partners.

Action 24/7 is expected to appeal the suspension following the release of a statement from CEO Tina Hodges. In the statement Hodges said:

“The Board today indefinitely suspended Action 24/7’s sports betting operator license for suspicious player deposit activity. This suspicious activity was detected quickly by Action staff and Action swiftly suspended the involved player accounts. Action instituted additional controls to curb the activity, and no further such activity has occurred since. Yet, the Board relied upon unfounded fears of future speculative recurrences of the activity, and took draconian action just as the NCAA Tournament is beginning. Obviously, we are disappointed in the Board’s decision, but will continue to work with TEL staff and seek all other avenues of relief to have the suspension lifted quickly so that the people of Tennessee may continue to enjoy wagering on the Action 24/7 sportsbook.”

The failings of Action 24/7 that led to the suspension were outlined to the board by Tennessee Education Lottery sports gaming investigator Danny DiRienzo. According to DiRenzo’s investigation hundreds of small deposits were made using several different credit cards into an Action 24/7 account. The totals deposited was in the tens of thousands of dollars. After minimal bets were made, multiple withdrawals were made from the account. This same pattern of multiple deposits followed by multiple withdrawals occurred on several Action 24/7 accounts.

DiRenzo called these actions clear cases of credit card fraud, money laundering, wire fraud and aggravated identity theft. He also explained that minimal control standards in Tennessee required sportsbooks to make sure everything is being done to spot and stop this kind of illegal behavior from happening. DiRenzo also added that if the minimal internal standards had been met and implemented by Action 24/7 the illegal activity could have been spotted and stopped early on.

Following the suspension of Action 24/7 there are five sportsbooks operating in the Tennessee market during the busy March Madness season. The suspension may not have a major impact on sports betting numbers in the state.

Numbers released in February showed Action 24/7 made up on three percent of the sports betting market in the state. The big three in the state are DraftKings, BetMGM and FanDuel, who combined account for over 95 percent of the sports betting market in the state.