Gambling Site Action 24/7 Suspended after Alleged Fraud, Money Laundering and Ilegal Proxy Betting

The operating license of one of Tennessees new online sportsbooks, Action 24/7, remains suspended by regulators following the emergence last week of alleged illegal activity on the site. Action 24/7, the first operator to receive licensing from the state, was yanked offline after it reported alleged credit-card fraud, money laundering, and illegal proxy betting that had occurred within its system.

By: Haley Hintze

The suspension marks the first time that any US-regulated online gambling has been shuttered, even if only temporarily.

Action 24/7’s current downtime came immediately after it notified the state’s regulators, the Tennessee Education Lottery, of two significant series of violations. On March 17th, the regulators learned of an alleged extreme case of credit-card fraud, where a customer was able to open an account and make an initial $10 deposit, then follow that with over 120 successful deposits made from other credit cards not in the user’s name. The customer then quickly cashed out the other deposits after conducting “minimal” wagering.

The second violation involved an agent of the site opening accounts and placing bets on behlf of at least 40 out-of-state residents. As with all US state-licensed sites, customers are required to physically be in the state while wagering, and the site’s agent admitted to placing wagers on the out-of-state customers’ behalf.

Adding fuel to the fire, Action 24/7 officials waited eight days to notify Tennessee’s regulators of the issues after learning of them on March 9th.

The latest issues follow an unpublicized earlier issue with 24/7 that also appears to have strengthened the regulators’ resolve. Tennessee Education Lottery investigator Danny DiRienzo described the alleged credit-card problem as "100% typical of every credit card fraud case I've worked over the past 25 years." DiRienzo then described a situation of Action 24/7’s processes not being up to the challenge. "The internal controls, in my opinion, based on the facts, are not in place to prevent future criminal conduct on this website," he said.

Action 24/7 only indirectly acknowledged its suspension, posting this on Twitter:

The site was unable to “get resolved” the unspecified “issue”, however, and its wagering platform remains unavailable. The site’s home page also offers no ready explanation to its customers regarding the downtime.

Action 24/7 has pitched itself as “the only Tennessee owned and operated sportsbook,” though it has been unable to capture a significant market share. According to US gambling market researchers Eilers & Krejcik Gaming, the company ranked a distant fourth behind BetMGM, FanDuel and DraftKings in February, capturing only 3% of the state’s online betting action.

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