Michael Jordan is mostly known for one thing: basketball. And as he once said about hoops, “You miss 100 percent of the shots you don’t take.” But perhaps his best quote comes from his other pastime, gambling: “I want people to understand, gambling is not a bad thing if you do it within the framework of what it’s meant to be, which is fun and entertaining.”
To an extent, that same spirit and intention is behind the recent spate of government approvals for online gambling. It removes stigma of “dark and illegal” and inserts “fun and entertaining.” That leads to the product of said online activity — and that’s money. Winnings. Spoils. And the delivery of that product is behind the value proposition of Tennessee’s newest sports betting firm, Action 24/7.
As the company’s CEO Tina Hodges says front and center on the company’s website, “When Tennesseans win big, they want their money fast. As a rookie bookie, I couldn’t agree more — Tennesseans should get their money quick and easy.”
With a little help from Ingo Money, Hodges is helping the Volunteer State’s gamers go big and fast. In a recent interview with PYMNTS, she credits the company’s unique same-day payouts for its growing popularity, especially among gamblers who have never placed bets before.
Hodges, known as the “Rookie Bookie” on social media, made her comments less than three months after Tennessee became the 20th state to launch sports betting on Nov. 1, a milestone that also made Action 24/7 the only locally owned sportsbook gaming operator of four licensed by the state.
“I would say about 30 percent of the people [we have signed up] had no gambling apps on their phone at all,” Hodges said in a roundtable interview with PYMNTS Karen Webster and Ingo Money CEO Drew Edwards. “We’re growing a market of people who have never bet before in Tennessee.”
While most people have played an office Super Bowl or March Madness pool, Hodges said that legal, regulated betting on sporting events has largely been a cash market enterprise that was the domain of black market bookies.
“We’re bringing sports gambling out of the shadows,” she said. “A lot of people are used to gambling in cash, and they’re used to meeting their local bookie and exchanging cash.”
As much as large betters are accustomed to the all-cash, under-the-table version, Hodges said Action 24/7 has many advantages that many gamblers have come to prefer. “People who’ve never bet before are casual betters. Obviously, you want to pull in those who are using other apps. But we are growing the size of the player pool.”
The High Rollers
While the instant betting and payout abilities are a positive, there is no competing with the black market when it comes to the collection of taxes.
“There are also people who bet large dollar amounts, and those are the people that have been betting with their local bookies,” Hodges said of this potentially lucrative subset of the market. “You can’t just go to PayPal and say, ‘I want to deposit $3,000 today.’ I mean, how long are they going to hold that [before clearing the funds]? You’re also not going to be able to bet on a game 10 minutes before it starts.”
Although 20 states now have active legal sports betting regimes, and five more are approved but still finalizing their launch dates, the growth of the industry in just two years since the Supreme Court’s 2018 landmark legalization decision has been staggering. While the number of states and gambling venues has risen exponentially, questions remain whether the pool of players is growing at a comparable rate or if new locations simply cannibalize existing operations.
Winning Converts
Although not a gambler or a sports fan himself, Ingo Money’s Edwards said he is a fervent believer in the industry.
“It has rapidly become clear to me that this is a meaningful, material, national, new vertical for money-in and money-out, which is what we do for payments,” Edwards said. “Now that [sports betting] is in the light, now that it is governed by the law and it’s a big deal, it’s probably going to spread across the nation.”
Although every state has its own set of regulations and licensing requirements, Hodges said it is a pretty steep and invasive 12- to 18-month process for a first-time operator to obtain a license. And although Edwards said it is daunting to take on giant, nationwide gambling outfits, such as MGM, he knew 24/7 would be able to compete, given its 20+ year track record within the highly regulated lending business.
“They are so perfectly suited to take on this challenge of making sure it’s done right,” Edwards said. “So this will scale in a big way, and I think big things are still to come for Action 24/7.”
Next Steps
“It’s very much like lending,” Hodges said, adding that every state is unique, including Tennessee, which limits gambling to online-only and requires licensees to withhold 10 percent of winnings. Even so, she said there is a lot of room to grow the payments portion of the business.
“There’s still a lot of opportunity for payment companies to enter this market because there are few providers, and the service level is not what I would call world-class,” she said. Instant payments are an essential part of the service level that Action 24/7 aims to provide.
— to www.pymnts.com
