Two Tennessee bills looking to put some distance between payday loan companies and online sportsbooks were on the House and Senate agenda for Tuesday.
Legislators originally postponed hearings on these bills last week. They cited ongoing issues with Action 24/7, one of the sportsbooks affected by these bills, as the cause.
Today’s assemblies once again postponed hearings on these bills to next week’s agendas.
The State and Local Government Committee will hear the bill next week for the Senate, and the Departments and Agencies Subcommittee will hear the bill for the House.
TEL approved Advance Financial vendor license in February
In February, the Tennessee Education Lottery (TEL) voted to approve Advance Financial’s vendor license.
In effect, the company was officially granted permission to process Action 24/7 deposits and withdrawals at any of its more than 100 Tennessee locations.
The decision was not without deliberation, however.
One board member expressed concern over a gambling business being so close to a high-risk loan company. Nevertheless, committee members could not deduce any legal reasons to bar the approval.
New bills focus on one particular sportsbook
Furthermore, the bills prohibit operators from requiring bettors to use winnings to pay off the balance of their flex loan.
The initial hearing to vote on SB 1029 was on March 23. Both committees ultimately postponed these bill hearings amid legal issues concerning Action 24/7.
The issues arose on March 18 when the TEL suspended Action 24/7’s license due to concerns over money laundering, proxy betting, and credit card fraud.
The sportsbook then took the TEL to court last Wednesday, where a judge temporarily reinstated its license.
Action 24/7 is currently taking bets and offering bonuses as well as accepting deposits and withdrawals. However, the initial hearings for the bills was in the midst of the drama, and representatives for Action 24/7 were not present to make their case.
Before last week’s hearing was adjourned, bill sponsor Sen. Richard Briggs brought industry expert Brianne Doura-Schawohl to the stand to testify.
As the Vice President of US Policy and Strategic Development for Epic Risk Management, Doura-Schawohl described the danger of intertwining a high-interest lending company with a sportsbook.
She believes two businesses such as this have no reason to operate side by side, referring to the partnership as a “dangerous concoction”.
Additionally, she had words for the state when it came to its general lack of funding for gambling addiction treatment.
Hearing delayed with the intent of introducing new testimony
Following Doura-Schawohl’s testimony, Sen. Ken Yager voiced a request to postpone a bill vote until this week. This would allow for testimony from the absent Action 24/7 representatives.
Briggs was open to the postponement. He noted that Action 24/7’s current predicament may be due at least in part to criminal elements outside of the company’s control. Nevertheless, he still favored this new bill for tightening restrictions and curbing potential risks. Briggs noted:
“This is the first sports betting organization in the US that has had their license suspended. Really, it’s something that has turned very bad. We need to put tighter controls in . . . We’ve got to get better guardrails on this whole process, because it has led to something that isn’t good.”
The bills would require the TEL to notify the Department of Financial Institutions about any potential violations. At that point, the department would assess penalties.
According to Advance Financial CEO and Action 24/7 CEO Tina Hodges, however, it is already company policy to deny loans to customers who visit locations for sports betting deposits or withdrawals.
All parties involved will have to wait until hearings scheduled for next week to make their case.
Another sports betting bill considered in Tuesday’s House session
While assemblies didn’t address these particular bills in today’s session, sports betting still garnered some attention with HB 1556.
The bill, in conjunction with SB 0944, requires a study to be conducted on the economic impact and regulatory oversight of each state that permits sports gaming.
The proposal, which seeks to create a sports gaming board that acts as a separate entity from the lottery, was taken off notice.
Legislators also scheduled a subsequent hearing for a second pair of sports betting-related bills.
HB 1267 and SB 588 propose that the Sports Wagering Advisory Council could meet independently of the TEL Committee Board to schedule hearings and create rules.
There is a lot of movement happening on the Tennessee sports betting front.