Published March 25, 2021 by Elana K
Tennessee sportsbook, Action 24/7, has become the first sportsbook in the United States to be suspended from legal operations.
Tennessee sportsbook Action 24/7 has won the non-coveted title of First U.S. Sportsbook to be Suspended. According to the Tennessee Education Lottery (TEL), the sports betting operator failed to stop numerous cases of suspected credit card fraud and money laundering. 24/7 was handed a temporary suspension that was followed by a nearly unanimous Board vote of upholding the suspension.
Tina Hodges, CEO of Action 24/7 has called the measures of the Board “draconian,” especially during March Madness. However, she said that she is trying to work quickly with the TEL to get the sportsbook up and running again.
The Charges Against Action 24/7
Danny DiRienzo, TEL sports gaming investigator, got an email from an Action 24/7 employee that contained 23 reports of separate incidents of potential fraud. The sportsbook knew about the incidents on March 9th but only reported them on March 17.
Most of the reports followed the same pattern: a player made a small deposit and all the information checked out. Then the player attempted to make hundreds of deposits from different credit cards with different names — and most of the transactions were successful. After minimal gameplay (a warning sign), the player requested withdrawals under their name.
DiRienzo classified these instances as credit card fraud, money laundering, wire fraud, and aggravated identity theft. He said that if the sportsbook has even minimal fraud alert standards in place, the activity would have been caught and prevented quicker.
He also noted that this isn’t the first time Action 24/7 had integrity issues. Before the Super Bowl, he received information that an employee of the sportsbook opened 45 player accounts, mostly for people that live out-of-state, and placed hundreds of bets. Known as proxy betting, this isn’t allowed, and DiRienzo tried to help the company get back on track.
Tennessee launched sports betting in November 2020 and has so far enjoyed a thriving industry. While it will forever hold the title of the state with the first sportsbook to be suspended in the U.S., it’s unlikely that the actual market will suffer. There are 5 other sportsbooks that are fully operational.