The judge overseeing the case involving the Tennessee-based Action 24/7 reportedly will work as quickly as she can to determine whether the Tennessee Education Lottery (TEL) should reinstate Action 24/7’s sports gaming operator license.
This, because of the loss of revenue the company is experiencing during the National Collegiate Athletic Association’s “March Madness” basketball tournament, according to LegalSportsReport.com
The website reported that Chancellor Patricia Moskal could maintain Action 24/7’s suspension or overturn it. Moskal could also require that the TEL have a hearing on the matter, the website said.
The company had a hearing in front of Moskal Wednesday.
Action 24/7 representatives did not return The Tennessee Star’s requests for comment Thursday.
Action 24/7 attorney E. Steele Clayton IV also did not return requests for comment.
As reported, officials with the Tennessee-based Action 24/7 on Monday filed a lawsuit seeking a temporary injunction that would require members of the TEL to reinstate the company’s sports gaming operator license. The suit lays out the TEL’s mishandling of one of its first attempts at disciplinary action failing to follow its own established guidelines and denying Action 24/7 due process. TEL suspended Action 24/7’s license late last week due to a self-reported incident of card fraud that the company found and stopped and has seen no recurring incidences since, says the suit.
Action 24/7 officials filed the suit in the 20th Judicial District Chancery Court in Nashville. Company officials, in the suit, called the TEL’s indefinite suspension “unlawful.”
LegalSports.com reported that “there was much debate over whether Action 24/7 actually deserved a hearing or if it got a hearing at all before the Board ratified and upheld its indefinite suspension last Friday.”
Lindsay Sisco of the Tennessee Attorney General‘s office told the publication that “there is no point in the court remanding the issue back to the board for hearing.”
“The court was asking what that could mean for a remand and I think the plaintiffs are right: that is potentially futile. The Board has considered the evidence and was able to hear from Action 24/7’s CEO and president,” Sisco said.
“I don’t expect any additional or differing evidence to be presented at a formal hearing before the same board members because if that evidence was available and presented then TEL staff would have the assurances they need to lift the temporary suspension.”
Action 24/7 officials said in their lawsuit that TEL members acted after Action 24/7 reported suspicious activity had been identified and stopped earlier this month. Action officials said they detected the suspicious activity, involving a limited number of players, mostly occurring during overnight hours.
“In response, Action took immediate countermeasures, including: suspending the accounts at issue and blocking their ability to deposit or withdraw funds or place wagers,” according to the suit.
Action officials said they notified the TEL Sports Gaming Investigator, intending to work with the TEL and the Tennessee Bureau of Investigation on prosecution of the perpetrators. Instead of the collaboration it was seeking, Action was handed a suspension.
“Rather than contacting Action to discuss, the Investigator, by his own admission, on March 18 reviewed only three or four of the incident reports. Then, based on what he has called a ‘guess’ about the total scope and magnitude of the suspicious activity, the Investigator leapt to the conclusion that the suspicious activity was much broader in scope than it really was, and informed TEL’s General Counsel, CEO , and Chair of TEL’s board of directors (the ‘Board’) of that hasty conclusion,” according to Action’s lawsuit.
“Later that same day (March 18), the Chair of TEL’s Board, based on the knee-jerk conclusions of the Investigator, informed Action that its license was suspended immediately without notice or the opportunity for a hearing. Even though under TEL’s own statute and regulations a suspension can be made only by the Board or the Committee. Even worse, this suspension occurred late in the afternoon on the first day of the single largest sports betting event of the year – the National Collegiate Athletic Association’s (“NCAA”) ‘March Madness’ basketball tournament.’”
The lawsuit went on to say that Action officials contacted the TEL’s general counsel last Friday and said the suspension violated the agency’s own procedures and denied them due process afforded in the Sports Gaming Act and subsequent Rules.
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Editor’s Note: Action 24/7, which is regulated by the TEL, has advertised with The Tennessee Star and Tennessee Star Report.