Tennessee Politician Intervened to Shield Payday Lender’s Betting Business From Regulators

Tennessee House Speaker Cameron Sexton used his position to protect a struggling sports betting operation owned by major donors to his campaign, as a payday lender allowed customers to use high-interest loans to place online wagers. 

A new investigation by ProPublica and the Tennessee Lookout reports Sexton intervened in 2021 after state regulators suspended Action 247, a local sportsbook owned by Advance Financial founders Michael and Tina Hodges. Regulators had concerns about the company’s business model, where a payday lender and a sports betting business operated out of the same storefront. This setup allowed customers to take out high-interest loans and then immediately deposit the funds into betting accounts, without ever leaving the store. 

According to the report, Sexton later expressed dissatisfaction with the Tennessee Education Lottery Corporation, which served as the state’s sports gambling regulator at the time, after it voted to suspend Action 247’s license. When the board didn’t respond the way he wanted, Sexton sponsored legislation that stripped it of its oversight powers and replaced it with a new regulatory body appointed by legislators. 

Sexton Targeted Gaming Board

Over the last decade, the Hodges gave approximately $105,000 to Sexton and his political action committee, making them one of his biggest campaign donors. In March 2021, their betting business, Action 247, was in trouble, and state investigators found “it lacked proper internal controls to enforce the state’s gambling laws.”

When the lottery board moved to suspend Action 247’s operations, Sexton reportedly met with its members and “made it clear he was not happy” with the decision. The board’s chair, Susan Lanigan, resigned not long after the meeting. By May 2021, Sexton moved legislation through the General Assembly to remove the board’s control over sports betting, replacing it with a new regulatory body that the legislature could more easily control. 

The investigation also found that high-profile political figures had financial stakes in Action 247, including Sexton’s senior campaign advisor. While Sexton denied tracking his associates’ investments, the regulatory changes he helped lead allowed the company to continue operating until it voluntarily announced its closure on January 16, 2026.

High-Interest Loophole

What has caused the most controversy is the business model the Hodges used, which allowed their company to seemingly bypass responsible gaming safeguards. Customers could go to an Advance Financial location, borrow up to $4,000 in “Flex Loans,” with interest rates as high as 279.5%, then immediately deposit the cash they’d borrowed into their Action 247 betting accounts at the same counter.

While Tennessee law, like many states with legalized gambling, explicitly prohibits bettors from using their credit cards to fund sports wagers, it doesn’t ban using borrowed money from high-interest payday loans. In late 2020, lottery investigators found brochures in Advance Financial stores explicitly linking the two services, advertising: “Deposit and Withdraw from your Action 247 Account Here!”

Former state Rep. Darren Jernigan, who attempted to pass legislation banning this co-mingling of lending and betting, described the arrangement as a “no-brainer” loophole that needed to be closed. “There was no way to verify if someone was borrowing and betting the money away,” Jernigan told investigators.