Tennessee sportsbook operator Tennessee Action 24/7 has filed a lawsuit against the Tennessee Lottery in response to the suspension of its sports betting license earlier this week.
In the lawsuit, the locally owned operator has challenged the regulatory process used to suspend its license. The suspension was handed out based on suspected debit card fraud, however, Tennessee Action 24/7 contests the level of fraud that investigators believe took place.
Sport betting investigator for the lottery, Danny DiRenzo said last week that had the company implemented the correct internal controls as specified in their license application, the fraudulent activity would have been spotted and stopped much sooner.
DiRenzo highlighted one instance where a player deposited $10 followed immediately by 184 deposits from seven other cards with seven different names. 124 of those deposits were successful allowing the player to place multiple small bets and then withdraw the winnings.
He stated that it was clear that the player was engaging in credit card fraud, money laundering, identity theft, or wire fraud.
Speaking at a meeting of the lottery board, DiRenzo said:
“It is serious, serious criminal activity, probably in the tens if not hundreds of thousands of dollars worth of damages done with multiple real individuals and business victims.”
However, despite DiRenzo’s findings, the lawsuit filed by the operator claims that the lottery acted outside of its authority by suspending its license.
Tennessee Action 24/7 is one of six sportsbook operators in the state and its suspension comes during one of the busiest periods of the year with the NCAA March Madness tournament in full swing.