How Tennessee’s Speaker of the House Helped Keep a Payday Lender’s Struggling Sports Gambling Company Alive
What's the endgame here?
The powerful owners of a payday lending company faced a crisis in March 2021 when their other business, a now-defunct sports gambling operation, was under investigation by Tennessee regulators.
The couple, Michael and Tina Hodges, had already turned to Tennessee Speaker of the House Cameron Sexton in 2014 to create a new triple-digit interest loan called a “Flex Loan.” The couple’s company, Advance Financial, through the Flex Loan, went on to make hundreds of millions of dollars lending to the state’s most financially vulnerable.
Now they needed Sexton’s help keeping their fledgling gambling business, Action 247, afloat as it tried to compete with sportsbooks like FanDuel and DraftKings, which were dominating the market in Tennessee and around the country.
In many states, regulators try to keep lending and betting separate; Virginia, for example, bans gambling operators from offering loans to customers. But in Tennessee, it’s different. A payday lender and a gambling company can have the same owners and operate out of the same storefronts.
From November 2020 through Jan. 16, when Action 247 closed, this was happening. A person could walk into any Advance Financial storefront and borrow up to $4,000 at a 279.5% interest rate. Then, at the same window, the customer could legally tell the store’s employee to deposit cash into an Action 247 account, through which they could gamble the money on something like a football game.
Members of the Tennessee Education Lottery Corp., which oversaw sports gambling at the time, were concerned by the arrangement and the company, but the agency’s board was prevented from doing anything about it by its attorney in January 2021. Two months later, the board attempted to assert its power over Action 247 by suspending its license for violations related to its failure to ensure that customers adhered to state gambling laws; ultimately, Action 247 went to court, where a judge lifted the suspension but allowed the agency to continue its investigation.
That’s when Sexton stepped in.
The Hodges own the majority of both Action 247 and Advance Financial. The payday lender is one of the largest donors to Sexton and his political action committee, giving around $105,000 over the past decade.
ProPublica and the Tennessee Lookout previously reported how, after creating the new type of payday loan, Advance has gone on to sue more than 110,000 Tennesseans, making the company one of the single largest plaintiffs in the state.
Tennessee Speaker of the House Cameron Sexton told a lottery board official he was not happy with the panel’s decision to suspend the online sportsbook Action 247; weeks later, he helped pass a bill to remove lottery oversight. John Partipilo/Tennessee Lookout
Through Action, the Hodges also brought in dozens of investors, including two with political ties to Sexton and other powerful state lawmakers, according to an investor document obtained by the Tennessee Lookout and ProPublica.
A month after the suspension, Sexton met with two members of the lottery board. The legislator “made it clear he was not happy” with the decision to suspend Action 247, said Susan Lanigan, the chair of the Tennessee …
What's the endgame here?
The powerful owners of a payday lending company faced a crisis in March 2021 when their other business, a now-defunct sports gambling operation, was under investigation by Tennessee regulators.
The couple, Michael and Tina Hodges, had already turned to Tennessee Speaker of the House Cameron Sexton in 2014 to create a new triple-digit interest loan called a “Flex Loan.” The couple’s company, Advance Financial, through the Flex Loan, went on to make hundreds of millions of dollars lending to the state’s most financially vulnerable.
Now they needed Sexton’s help keeping their fledgling gambling business, Action 247, afloat as it tried to compete with sportsbooks like FanDuel and DraftKings, which were dominating the market in Tennessee and around the country.
In many states, regulators try to keep lending and betting separate; Virginia, for example, bans gambling operators from offering loans to customers. But in Tennessee, it’s different. A payday lender and a gambling company can have the same owners and operate out of the same storefronts.
From November 2020 through Jan. 16, when Action 247 closed, this was happening. A person could walk into any Advance Financial storefront and borrow up to $4,000 at a 279.5% interest rate. Then, at the same window, the customer could legally tell the store’s employee to deposit cash into an Action 247 account, through which they could gamble the money on something like a football game.
Members of the Tennessee Education Lottery Corp., which oversaw sports gambling at the time, were concerned by the arrangement and the company, but the agency’s board was prevented from doing anything about it by its attorney in January 2021. Two months later, the board attempted to assert its power over Action 247 by suspending its license for violations related to its failure to ensure that customers adhered to state gambling laws; ultimately, Action 247 went to court, where a judge lifted the suspension but allowed the agency to continue its investigation.
That’s when Sexton stepped in.
The Hodges own the majority of both Action 247 and Advance Financial. The payday lender is one of the largest donors to Sexton and his political action committee, giving around $105,000 over the past decade.
ProPublica and the Tennessee Lookout previously reported how, after creating the new type of payday loan, Advance has gone on to sue more than 110,000 Tennesseans, making the company one of the single largest plaintiffs in the state.
Tennessee Speaker of the House Cameron Sexton told a lottery board official he was not happy with the panel’s decision to suspend the online sportsbook Action 247; weeks later, he helped pass a bill to remove lottery oversight. John Partipilo/Tennessee Lookout
Through Action, the Hodges also brought in dozens of investors, including two with political ties to Sexton and other powerful state lawmakers, according to an investor document obtained by the Tennessee Lookout and ProPublica.
A month after the suspension, Sexton met with two members of the lottery board. The legislator “made it clear he was not happy” with the decision to suspend Action 247, said Susan Lanigan, the chair of the Tennessee …
How Tennessee’s Speaker of the House Helped Keep a Payday Lender’s Struggling Sports Gambling Company Alive
What's the endgame here?
The powerful owners of a payday lending company faced a crisis in March 2021 when their other business, a now-defunct sports gambling operation, was under investigation by Tennessee regulators.
The couple, Michael and Tina Hodges, had already turned to Tennessee Speaker of the House Cameron Sexton in 2014 to create a new triple-digit interest loan called a “Flex Loan.” The couple’s company, Advance Financial, through the Flex Loan, went on to make hundreds of millions of dollars lending to the state’s most financially vulnerable.
Now they needed Sexton’s help keeping their fledgling gambling business, Action 247, afloat as it tried to compete with sportsbooks like FanDuel and DraftKings, which were dominating the market in Tennessee and around the country.
In many states, regulators try to keep lending and betting separate; Virginia, for example, bans gambling operators from offering loans to customers. But in Tennessee, it’s different. A payday lender and a gambling company can have the same owners and operate out of the same storefronts.
From November 2020 through Jan. 16, when Action 247 closed, this was happening. A person could walk into any Advance Financial storefront and borrow up to $4,000 at a 279.5% interest rate. Then, at the same window, the customer could legally tell the store’s employee to deposit cash into an Action 247 account, through which they could gamble the money on something like a football game.
Members of the Tennessee Education Lottery Corp., which oversaw sports gambling at the time, were concerned by the arrangement and the company, but the agency’s board was prevented from doing anything about it by its attorney in January 2021. Two months later, the board attempted to assert its power over Action 247 by suspending its license for violations related to its failure to ensure that customers adhered to state gambling laws; ultimately, Action 247 went to court, where a judge lifted the suspension but allowed the agency to continue its investigation.
That’s when Sexton stepped in.
The Hodges own the majority of both Action 247 and Advance Financial. The payday lender is one of the largest donors to Sexton and his political action committee, giving around $105,000 over the past decade.
ProPublica and the Tennessee Lookout previously reported how, after creating the new type of payday loan, Advance has gone on to sue more than 110,000 Tennesseans, making the company one of the single largest plaintiffs in the state.
Tennessee Speaker of the House Cameron Sexton told a lottery board official he was not happy with the panel’s decision to suspend the online sportsbook Action 247; weeks later, he helped pass a bill to remove lottery oversight. John Partipilo/Tennessee Lookout
Through Action, the Hodges also brought in dozens of investors, including two with political ties to Sexton and other powerful state lawmakers, according to an investor document obtained by the Tennessee Lookout and ProPublica.
A month after the suspension, Sexton met with two members of the lottery board. The legislator “made it clear he was not happy” with the decision to suspend Action 247, said Susan Lanigan, the chair of the Tennessee …
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