NASHVILLE, Tenn. — A Tennessee sports betting company has sued state officials to try to overturn its suspension, according to the Associated Press.
The company’s sportsbook was suspended last week due to suspected fraud and money laundering in accounts on its betting platform.
On Monday, Tennessee Action 24/7 filed the lawsuit against Tennessee Lottery officials, the report said.
The company is challenging the regulatory process used to suspend them, and is questioning the level of debit card fraud that allegedly occurred.
The company is one of six authorized to run sportsbooks under Tennessee’s online-only sports betting law, according to the AP.
Sports betting began in November 2020.
The suspension remains in effect indefinitely until a review finds that proper internal controls are in place going forward, the report said.
The lawsuit filed by Tennessee Action 24/7 says the lottery acted outside of its authority when its top officials suspended the license last Thursday, before the board voted on the move the following day.
The company was on the phone during the meeting but the board “refused to hear their position,” the lawsuit says. Discussions between the parties also unfolded via emails ahead of the meeting, according to the AP.
The sportsbook operator said it self-reported the suspicious activity March 17, sending the lottery 23 incident reports of activity that occurred March 9 through 12.
According to the AP’s report, the total amount of fraudulent deposits was around $37,362, of which the company has recovered $14,701.
$22,661 in fraudulent withdrawals were made by seven people to four bank accounts.
Lottery CEO Rebecca Hargrove said if the company had not waited days to notify the lottery, the issue could have been resolved quicker, according to the AP.
The Associated Press contributed to this story.
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