How a Tennessee Official Saved Advance Monetary’s Sports activities Betting Firm Alive — ProPublica

The highly effective house owners of a payday lending firm confronted a disaster in March 2021 when their different enterprise, a now-defunct sports activities playing operation, was beneath investigation by Tennessee regulators.

The couple, Michael and Tina Hodges, had already turned to Tennessee Speaker of the Home Cameron Sexton in 2014 to create a brand new triple-digit curiosity mortgage referred to as a “Flex Mortgage.” The couple’s firm, Advance Monetary, by means of the Flex Mortgage, went on to make lots of of thousands and thousands of {dollars} lending to the state’s most financially susceptible.

Now they wanted Sexton’s assist conserving their fledgling playing enterprise, Motion 247, afloat because it tried to compete with sportsbooks like FanDuel and DraftKings, which had been dominating the market in Tennessee and across the nation.

In lots of states, regulators attempt to hold lending and betting separate; Virginia, for instance, bans playing operators from providing loans to clients. However in Tennessee, it’s totally different. A payday lender and a playing firm can have the identical house owners and function out of the identical storefronts.

From November 2020 by means of Jan. 16, when Motion 247 closed, this was occurring. An individual may stroll into any Advance Monetary storefront and borrow as much as $4,000 at a 279.5% rate of interest. Then, on the identical window, the shopper may legally inform the shop’s worker to deposit money into an Motion 247 account, by means of which they may gamble the cash on one thing like a soccer sport.

Members of the Tennessee Training Lottery Corp., which oversaw sports activities playing on the time, had been involved by the association and the corporate, however the company’s board was prevented from doing something about it by its lawyer in January 2021. Two months later, the board tried to say its energy over Motion 247 by suspending its license for violations associated to its failure to make sure that clients adhered to state playing legal guidelines; finally, Motion 247 went to court docket, the place a decide lifted the suspension however allowed the company to proceed its investigation.

That’s when Sexton stepped in.

The Hodges personal the vast majority of each Motion 247 and Advance Monetary. The payday lender is among the largest donors to Sexton and his political motion committee, giving round $105,000 over the previous decade.

ProPublica and the Tennessee Lookout beforehand reported how, after creating the brand new kind of payday mortgage, Advance has gone on to sue greater than 110,000 Tennesseans, making the corporate one of many single largest plaintiffs within the state.

By means of Motion, the Hodges additionally introduced in dozens of traders, together with two with political ties to Sexton and different highly effective state lawmakers, in keeping with an investor doc 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 blissful” with the choice to droop Motion 247, mentioned Susan Lanigan, the chair of the Tennessee Training Lottery Corp.’s board on the time.

When it appeared lottery officers weren’t going to drop their ongoing investigation into Motion, Sexton pushed by means of laws to take away the board’s management over sports activities betting. Lower than a month after the closed-door assembly with Lanigan, the state lottery was out of sports activities gaming and a brand new regulator, over whom members of the legislature may wield extra management, was in.

Sexton responded to the information retailers’ questions in an announcement wherein he mentioned that creating the brand new regulatory physique was a coverage choice that included members of the lottery.

After the lottery misplaced management of sports activities playing, it ended the investigation into Motion. The corporate survived, however as one of many smallest sportsbooks in Tennessee. Nationwide manufacturers have dominated sports activities betting within the state.

Motion introduced on its web site on Jan. 16 that it was shutting down. Cullen Earnest, the senior vice chairman of public coverage at Advance Monetary and a onetime lobbyist for Motion 247, despatched an announcement from Tina Hodges, who mentioned, “The present panorama for state-licensed on-line sports activities playing in the USA has confirmed to be unviable and unprofitable for all operators within the business.”

The Tennessee Lookout and ProPublica have been investigating Advance and Motion for over a 12 months. In December 2025, a reporter despatched Earnest and Sexton an inventory of questions concerning the firm’s politically tied traders and the connections between the playing and lending companies. Sexton mentioned, in an emailed assertion, “I don’t sustain with each funding of individuals I do know.” Earnest didn’t reply to the precise questions.

Earnest, when requested concerning the lottery investigation, mentioned by e mail that the company “was clearly lower than the duty” of regulating sports activities betting.

With Motion’s closure, no payday lender is tied to a playing firm, however beneath Tennessee legislation it’s nonetheless allowed.

Brianne Doura-Schawohl, the previous legislative director for the playing harm-reduction advocacy group Nationwide Council on Downside Playing, mentioned the blending of high-interest lending and playing is problematic as a result of research present folks with a playing habit usually tend to wrestle with their monetary selections and to borrow cash they’ll’t afford to pay again by means of merchandise like payday loans.

Doura-Schawohl mentioned no different state had a situation the place a high-interest lender owns a playing operation and might use its storefronts to draw clients.

“It’s simply actually unhealthy and, frankly, predatory,” she mentioned.

In Tennessee, nonetheless, Advance Monetary has round 80 storefronts, and Motion 247 had operations in any respect of them for over six years.

“We Have been Alarmed”

In April 2020, the Tennessee lottery board opened functions for companies to use for licenses to run on-line sports activities betting operations. Motion 247 had been based a 12 months earlier, the day after lawmakers legalized sports activities betting, hoping to be one of many first firms to enter the brand new enterprise. All firms in search of a sports activities betting license had been required to bear vetting earlier than receiving approval, and through that course of, Lanigan mentioned lottery officers believed on the time that Motion would function independently of Advance.

Regulators accepted Motion’s license, and the corporate launched its on-line sports activities betting operations in November and started providing all Advance Monetary shops as a spot to deposit into or money out of an Motion betting account.

On the time, Tennessee legislation mentioned nothing about payday lenders working with betting firms. The lottery had no guidelines banning the apply. However in its rules of lottery and scratch tickets, it prevented shops like Advance from promoting the merchandise, acknowledging the hazards of blending lending and that type of playing.

However nearly two weeks after the launch of on-line sports activities betting, regulators grew involved. A playing investigator for the lottery, working off a tip, entered an Advance retailer in Nashville and located brochures promoting Motion 247.

“Motion 24/7 is the primary regionally owned and operated sports activities guide in Tennessee, providing handy money deposits and withdrawals,” the brochures learn. “It’s really easy. For a $2 charge, any Advance Monetary retailer location will help you withdraw your money or load your account.”

With the brochure in hand, officers started drafting a violation discover.

Regulators emailed Tina Hodges in December 2020, asserting that the corporate was utilizing Advance as an “unregistered vendor” and asking her to clarify how the businesses had been working collectively. “It’s evident that our licensing choice might have been primarily based on an incomplete image of your online business mannequin,” mentioned lottery officers within the discover.

At a January 2021 assembly, the lottery board discovered from its lawyer that there was no legislation particularly banning the Motion and Advance association.

“We had been alarmed,” mentioned Lanigan, the chair on the time.

Lanigan made it clear on the assembly that the lottery board itself couldn’t cease the apply. However regulators continued to look into the corporate, discovering it lacked correct inner controls to implement the state’s playing legal guidelines. By March 2021, the lottery board took the regulators’ suggestions to droop the corporate till it may repair them.

Per week later, a decide dominated the corporate ought to stay in enterprise whereas the investigation continued. However now lottery officers had grabbed the eye of Sexton.

In March 2021 — the identical month that the board suspended the Motion 247 operations — laws Sexton co-sponsored to take away the lottery board’s management of on-line sports activities betting fully obtained its first committee listening to within the state Home.

In 2021, Sexton was two years into his place because the state’s strongest legislative official, and his rise had been partly aided by marketing campaign donations from the Hodges. The steps he took to take away the regulators stood to assist not simply the couple but additionally some politically related traders in Motion 247, in keeping with an investor doc.

Certainly one of them was John “Chip” Saltsman, who took the job as Sexton’s senior marketing campaign adviser when he grew to become speaker in 2019. The opposite was Ward Baker, a marketing campaign adviser for Tennessee’s two U.S. senators and the state Senate majority chief. Saltsman initially invested $150,000 and Baker $100,000, however Advance’s house owners had returned among the funding, leaving Saltsman with $18,000 invested within the firm and Baker with $12,000.

Saltsman and Baker didn’t reply to calls, texts and questions despatched by the information retailers. Sexton, in an emailed assertion, mentioned: “Regardless of what you’re insinuating, my focus and selections stay on the problems that matter to our state, our communities and to Tennesseans. My crew manages marketing campaign logistics, supplies transparency and ensures compliance to marketing campaign legal guidelines.”

In April, as Sexton’s invoice moved by means of the state legislature, Lanigan, the lottery board chair, and William Carver, the vice chair, met with Sexton. Lanigan mentioned she got here to the assembly anticipating a radical dialog about the way forward for sports activities betting and what regulatory physique ought to oversee it. As a substitute, she mentioned, Sexton solely needed to speak concerning the suspension of Motion 247 and his frustration at lottery officers. Bowled over, she resigned shortly after the assembly.

In Could 2021, within the ultimate days of the legislative session, Sexton pushed his laws by means of.

When Tennessee handed its legislation giving the lottery management of sports activities betting and oversight of a sports activities wagering advisory council, Sexton wasn’t the Home speaker. Two years later, at Sexton’s behest, lawmakers reversed this choice by making a sports-betting-specific company that, in keeping with Doura-Schawohl, doesn’t exist in another state.

In his emailed assertion, Sexton mentioned that some members of the sports activities wagering advisory council “had severe points” with how the lottery was conducting enterprise when it got here to sports activities betting. He mentioned that the choice to create the brand new entity occurred “after a lot dialogue and deliberation with board members.”

William Orgel, a member of the sports activities wagering advisory council since 2019 and present chair of the brand new physique, mentioned the council doesn’t contain itself in legislative coverage, including if the lawmakers thought a brand new company was essential, the panel would “say effective.”

“I consider our physique has been fairly hands-off, not less than I’ve,” Orgel mentioned. “I’m not in there attempting to make or foyer for the principles or coverage, and I’ve by no means heard of anybody else doing that both.”

Whereas Sexton was engaged on eradicating the lottery’s management, former Democratic state Rep. Darren Jernigan of Nashville mentioned he noticed the information of Advance and Motion’s co-mingling and determined to suggest a legislation to ban it.

Jernigan discovered a Republican sponsor within the state Senate and constructed a bipartisan coalition of almost one-third of the state’s Home members to co-sponsor the invoice.

Jernigan mentioned that the laws was a “no-brainer.” The American Gaming Affiliation reported in July 2025 that 35 of the 38 states which have legalized playing, plus Washington, D.C., have limits on gaming operators permitting bettors to make use of borrowed cash. This consists of Tennessee, the place lawmakers have barred gamblers from utilizing a bank card to load cash into an account.

Jernigan advised the Tennessee Lookout and ProPublica he thought it was harmful to place any kind of playing operations in locations that additionally provide fast, high-interest loans.

“There was no technique to confirm if somebody was borrowing and betting the cash away,” Jernigan mentioned.

As soon as the invoice was transferring, nonetheless, the lobbying began. Jernigan mentioned Earnest, the Advance vice chairman, engaged on behalf of each Hodges-owned firms as a lobbyist, went round attempting to steer his co-sponsors to drop their assist of the invoice. Former state Rep. Sam Whitson, a Republican, mentioned the lobbyist approached him in an effort to get him to withdraw his backing.

The invoice confronted delay after delay in getting out of its committee. In April 2021, because the state Home’s banking subcommittee appeared poised to vote down the laws, Jernigan withdrew it.

Jernigan mentioned that with hindsight he wished he’d tried to convey the invoice again up earlier than he left the state Home three years later, and that it’s a loophole within the legislation that must be closed.