Advance Financial: How a Tennessee Official Saved a Sports Betting Firm

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 where dominating the market in Tennessee and around the ⁢country.

In many states, regulators⁢ try to keep ⁢lending and betting separate; Virginia,‌ such as, 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 somthing 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.

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.

AI am sorry, but the provided⁢ text consists only of image metadata and captions. There is no article body present in the given source material. Therefore, I cannot fulfill your request to return the final HTML article body.earlier, the day after‍ lawmakers legalized sports betting,‌ hoping to be one ‍of ⁤the first companies‍ to ⁤enter the⁢ new business. ‌All companies seeking a sports betting license were required to undergo vetting before receiving approval, and during that process, Lanigan said ​lottery officials believed at the time that Action woudl operate independently of Advance.Regulators approved Action’s license, and the company‌ launched ⁣its‍ online‍ sports betting operations in ‌November and began offering all Advance financial stores as a place to deposit into or cash out of an Action betting account.

At the time,Tennessee law said nothing about payday lenders working with betting companies. The​ lottery had no rules banning the practice. But in its regulations of lottery and scratch tickets, it prevented stores ⁢like Advance from selling the products, acknowledging the dangers of mixing lending and that form⁣ of gambling.

But almost two weeks after the ⁣launch of online sports betting, regulators‍ grew concerned. ​A gambling⁤ investigator⁤ for the ‌lottery, working off a tip, entered an Advance store in Nashville and found brochures advertising‌ Action 247.

“Action 24/7 is the first locally owned and‌ operated sports book in Tennessee, offering convenient cash deposits and withdrawals,” the brochures‍ read. “It’s so easy.For a $2‍ fee, any Advance Financial store location can definitely help you withdraw your cash or⁣ load your account.”

With the brochure in hand, officials⁢ began drafting a violation notice.

Regulators emailed Tina Hodges in December 2020, asserting that the company was using Advance as an “unregistered vendor” and asking her to explain how the companies​ were working together.”It is evident that⁣ our ‍licensing decision may have been based on an incomplete picture

Tennessee Law Restricts Borrowed Money for Gambling

Tennessee enacted legislation in January 2026 prohibiting gamblers from using borrowed funds,‌ including payday loans and lines of credit, to finance their bets.

Background on the Legislation

State ⁤Representative Harold‌ Jernigan, a Democrat from Old hickory, sponsored the bill after becoming concerned ⁤about ‌the potential for predatory lending practices to fuel gambling addiction. ​He secured Republican sponsorship in the state Senate and garnered bipartisan support, with nearly one-third of the state’s House members co-sponsoring the legislation.

Prevalence of Restrictions on Borrowed funds

According to a July 2025 report by ​the American Gaming Association, 35 of the 38 states ‍with legalized gambling, plus Washington, D.C., already have restrictions ⁢on gaming operators allowing bettors to⁢ use borrowed money. Tennessee previously prohibited the use of credit cards to fund gambling accounts.

Concerns About Predatory Lending

Jernigan expressed concern about the dangers of⁢ locating gambling operations near quick,‌ high-interest loan providers. He‍ stated, “There was no way⁢ to verify if ‍someone was borrowing and betting the money away.” This concern ‍drove the legislation’s focus on preventing access to borrowed funds for gambling purposes.