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First online betting operator to get US licence suspended now sues state

Tennessee-based sportsbook Action 24/7 becomes the first operator to have its US licence suspended, now is suing state officials amid fraud allegations

Tennessee-based sportsbook Action 24/7 is suing state officials in bid to overturn the suspension of their US licence amid fraud allegations. The state's regulator, the Tennessee Education Lottery, suspended Action 24/7's online casino license after suspecting suspicious player activity involving credit card fraud and money laundering. 

Danny DiRienzo, the Lottery's sports betting investigator, uncovered evidence of one customer that had made 184 different deposits from seven credit cards - all of which weren't under his name. The player then withdrew after "very little gameplay”.

Commenting on the news, he shared to iGB North America:

This was clearly a case of money laundering,

It was clearly a case of aggravated identity theft, clearly a case of wire fraud.

In addition, the investigator received 22 other incidence reports involving "very serious" cases of proxy betting. 

Initially, the Lottery board was to propose Action 24/7 accept wagers while investigations into the suspicious activity continued yet found it “lacked adequate internal controls to prevent more players or citizens being harmed".

Board member William Carver explained the reasoning behind the final decision to suspend the licence stating:

Due to the circumstances we have identified, the risk to players, the risk to non-player victims as a result of fraud, the fact we did have a week’s delay in receiving notice, the fact that minimum internal controls are in suspicion, I would make a motion to indefinitely suspend the license of Action 24/7,

On Monday, Tennessee Action 24/7 filed a lawsuit against Tennessee Lottery officials due to the untimely suspension of their licence as missing out on the fast approaching men's basketball NCAA Tournament is a major blow to the business. The operator has also voiced concerns over the regulatory process that suspended them as well as the level of credit card fraud reported by DiRienzo. 

For the time being, the suspension will be in place until proper internal controls are observed within Action 24/7. 

Action 24/7 received its Tennessee licence just a few months ago in October 2020. Currently, the online sportsbook doesn't in other locations. 

Source: iGaming Business

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