Action 24/7’s sportsbook licence has been reinstated after an appeal for a temporary injunction was granted.
The Tennessee-based sportsbook Action 24/7 has had its sports betting licence reinstated following an appeal for a temporary injunction.
In March, Action 24/7 became the first US sports betting operator to have its licence suspended.
Why was the licence suspended?
The operator’s licence was suspended due to multiple instances of alleged credit card fraud, money laundering and proxy betting.
The Tennessee Education Lottery (TEL), which regulates the market, heard a report from its sports betting investigator, Danny DiRienzo, who noted that the operator submitted 23 incident reports on 17 March. Although DiRienzo gave the operator credit for spotting the activity, he said the operator had known about them from 9 March.
DiRienzo said that each account had similar patterns and said that these were clearly cases of credit card fraud, wire fraud, aggravated identity theft and money laundering.
DiRienzo also referred to another issue involving a contracted employee opening 45 player accounts, of which 40 were for out of state residents, and placing hundreds of bets before the Super Bowl.
In response to the suspension, the sportsbook operator filed a lawsuit in Davidson County Chancery Court and argued that the suspension was “erroneous and arbitrary” and the timing caused “irreparable harm.”
One of the main points of the lawsuit was whether the TEL Board Chair Susan Lanigan had the authority to suspend the operator’s licence.
The operator argued that Lanigan had handed down the suspension before the board met as a whole to vote on the issue. Action 24/7 said that this was not within her authority.
Action 24/7 also said that it had not been given an opportunity to speak when the TEL board met to discuss the issue.
Action 24/7’s licence is reinstated
Following the hearing, the Court ruled in favour of Action 24/7 and agreed that the TEL supported the licence suspension before the operator had a chance to argue its case.
It was also revealed that the entire TEL board may not have had the opportunity to review the information provided by the operator before the meeting.
The court ultimately ruled that TEL broke its own rules in holding the meeting to discuss the operator’s licence. According to the court, the TEL cannot make “a final decision without conducting a hearing, or at a minimum, allowing the licensee to address the TEL board upon request.”
The TEL has therefore been ordered to reinstate the operator’s sportsbook licence as a result.
Action 24/7 president Tina Hodges, said: “We applaud the Court’s decision and look forward to working with state officials to ensure public safety and trust in our regulatory system while maintaining an environment for businesses to thrive in Tennessee.”