When it comes to the license suspension of Tennessee sportsbook Action 24/7, Nashville judge Patricia Moskal says the Tennessee Education Lottery (TEL) “can’t have a redo”.
On Monday, April 13, Moskal ruled that the TEL had no “unilateral right” to take action against an issue she had already made a judgment on.
Action 24/7’s License Reinstatement Upheld
The TEL indefinitely suspended Action 24/7’s operating license back in March after ongoing issues regarding proxy betting, money laundering, and credit card fraud happening on the site.
Action 24/7 self-reported these issues and reached out to the TEL for guidance on the matter over a week after discovering problems. A surface level examination was enough for TEL investigator Danny DiRienzo to deduce that illicit activity was undoubtedly taking place.
TEL Chair Susan Lanigan swiftly suspended the sportsbook’s license on March 18 based off DiRienzo’s findings. One day later, the TEL held an emergency meeting to ratify the decision made by Lanigan.
Action 24/7’s suspension came at an inopportune time in the betting world…on the first day of March Madness.
Representatives argued that this caused “immediate and irreparable harm” to the brand.
Consequently, Action 24/7 requested to settle the issue in court. On March 26, Moskal ruled that the TEL did not follow proper due process when suspending Action’s license. Lanigan suspending the license before the Board took a vote was one of the issues.
She granted an injunction and reinstated the sportsbook’s license.
After the reinstatement, TEL members planned to hold a subsequent hearing to review the matter further and come up with any next steps.
They originally scheduled a hearing on Wednesday, April 14. Action 24/7 reps, however, said this matter is one for the judicial system to rule on rather than the TEL.
Judge hears both sides of the argument
This Monday, TEL representative J.P. Urban emphasized the need for a subsequent hearing, saying the issues jeopardize the public’s safety and puts the reputation of the entire Tennessee sports wagering industry at risk.
Moskal sided with Action 24/7 here. She maintained that the TEL’s role ended when the entire board ratified Action 24/7’s temporary suspension during the emergency meeting.
Her comments were detailed in a report earlier this week by The Tennessee Star.
“When I pressed without any hearing the response was ‘Well, they were heard on the papers at that full board meeting, and it was in fact a final action of the board.’ But now you are coming back and saying you are retreating from that position, saying it was not a final action and now you want to proceed with an administrative hearing?”
Urban retorted,
“The TEL needs to regulate, and the only way Action 24/7’s internal controls can be assured to be in compliance is by hearing both sides by the experts and the TEL.”
TEL claims there’s no more infractions
E. Steele Clayton IV represented Action 24/7 in the hearing. Action 24/7 has incurred no additional infractions since reinstatement. Referring to Action 24/7 CEO Tina Hodges’ recent declaration, Clayton remarked,
“She specifically said that there have been no further debit card fraud violations. She has not been advised by the TEL that there have been other types of violations. Those are the facts. They don’t have a basis now to say ‘We want to have a hearing just to talk about your internal controls.’ You don’t, under the regulations, get to have a hearing just for the heck of it. You have to have a suspension, a revocation, or a suitability finding.”
The judge agreed and essentially ruled that the TEL doesn’t get a redo on this one.
Action 24/7 is back in the ring for the time being. But this operator will need to stay light on its feet to avoid a 1-2 punch from the regulator.
