Action 24/7, a licensed Tennessee sportsbook operator, filed a lawsuit against the state regulator after its license was temporarily suspended. The operator claims that the regulator did not follow its protocols and that the suspension has catastrophic effects on its business.
Tennessee Sportsbook Files Lawsuit against Regulator
Last week, the Tennessee gambling watchdog suspended Action 24/7 license temporarily. Suspecting money laundering and credit card fraud, the Tennessee Education Lottery (TEL) took the measure during a Friday meeting last week.
Now, Action 24/7 decided to challenge TEL’s decision and filed a lawsuit. The operator filed the legal action on Monday and the Davidson County Chancery Court in Nashville is expected to hear the case today. Action 24/7 seeks to revoke the regulator’s decision, claiming that the TEL “unlawfully disabled Action’s ability to operate despite the fact its license had not been lawfully suspended”.
Considering that the temporary suspension came around the same time as the start of the men’s basketball NCAA Tournament, Action stressed that the suspension already had “catastrophic effects”. Furthermore, the company added that the suspension will continue to have such a negative effect on its ability to operate as a business.
Additionally, in its lawsuit, Action claimed that the regulator did follow its procedures when the decision for license suspension was taken. Initially, on Thursday, March 18, the operator’s license was temporarily suspended. However, the TEL board meeting, which upheld the suspension, was conducted on the next day – Friday.
Action 24/7 Disagrees with TEL’s Investigator Claims
Action 24/7 filed a total of 23 incident reports on March 17 with the regulator for activities between March 9 and March 12. However, when the operator’s license was suspended temporarily on Thursday, the TEL’s investigator Danny DiRienzo said that he only reviewed three or four of the reports, but claimed that there were “tens of thousands of dollars“ involved.
The sportsbook argued, saying that it self-reported the issue and pointed out that the total amount of fraudulent deposits was approximately $37,362. However, from that total, the company was able to recover and it is currently in possession of $14,701. In other words, this leaves only $22,661 in fraudulent withdrawals which were completed.
Last week, DiRienzo claimed that the evidence is “typical” for every credit card fraud case he has worked on. Furthermore, he claimed that the sportsbook’s internal controls “are not in place to prevent future criminal conduct“.
Action 24/7 argued in its lawsuit, saying that the investigator lacks sufficient understanding of such transactions. Furthermore, the operator said that DiRienzo has “unreasonable expectations” of the level of diligence expected from Action and other operators when it comes to fighting card payment fraud.