Action 24/7 Files Suit to Have License Reinstated in Tennessee

Action 24/7 Files Suit to Have License Reinstated in Tennessee

Action 24/7, the local Tennessee sportsbook that had its license suspended by the Tennessee Education Lottery last week, is suing to have the license reinstated immediately.

The suit, filed Monday in the 20th Judicial District Chancery Court in Nashville (Davidson County), is seeking a temporary injunction to reinstate the company’s sports betting license. A hearing has been scheduled for Wednesday before Chancellor Patricia Head Moskal.

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The lottery board chair, Susan Lanigan, suspended Action 24/7’s license on March 18, and it was upheld by the board the next day during an emergency meeting in Tennessee.

According to the lawsuit, Action 24/7 says it was denied due process and that Lanigan did not have the authority to suspend the license on March 18:

”By statute and regulation, TEL has the authority to issue, suspend, and revoke, sports gaming operator licenses in Tennessee. However, the authority to suspend a license is limited to TEL’s board of directors (the “Board”), or the Board’s Sports Wagering Committee,” the lawsuit states.

“On March 18, 2021, the Chair of the Board, acting with TEL’s General Counsel, TEL’s CEO, and TEL’s Sports Gaming Investigator, told Action that its license was suspended, even though neither the full TEL Board, or even the Sports Wagering Committee, had been convened to vote on the matter. TEL unlawfully disabled Action’s ability to operate despite the fact its license had not been lawfully suspended,” it says.

Suit: Action 24/7 Not Allowed to be Heard

Action 24/7 self-reported alleged suspicious activity on March 17. Danny DiRienzo, sports gaming investigator for the lottery, told the lottery board during an emergency hearing on March 19 that bettors had allegedly committed credit card fraud, money laundering and proxy wagering on Action 24/7. The board then upheld the suspension.

The lawsuit, first reported by the Tennessee Star, contends that “under well-settled procedural due process jurisprudence, Action must be given notice and a right to be heard. A pre-deprivation hearing is required prior to even a temporary suspension or revocation of a property interest such as a license to operate a business.”

The suit says that Action 24/7 was not given the opportunity to be heard at the hearing despite being present and prepared to speak. According to the suit, the board ignored Sports Gaming License Rules, Regulations & Standards 15.2 and 15.3 that provide procedural safeguards for licensees subject to the board’s control, including suspension and appeals procedures.

’Irreparable Harm to its Business’

With the NCAA Tournament beginning on the day the license was suspended, Action 24/7 says it “suffered and continues to suffer irreparable harm to its business as its customers place bets with competitors, many never to return.”

After the suspension was announced, Action 24/7 CEO Tina Hodges issued the following statement:

"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."

Online sports betting launched Nov. 1 in Tennessee with BetMGM, DraftKings, FanDuel and Action 24/7 going live. William Hill and TwinSpires have since launched in the all-online market.

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