Small Sportsbooks Face More Challenges in 2026
While Tina Hodges was criticized for her complaints about the sports betting industry’s uneven playing field, it's hard to argue against her.
Many small sportsbooks have failed since PASPA was overturned in 2018. With DraftKings and FanDuel securing more than 80% of the US market share, there's not much left for other operators. BetMGM, Caesars, and Fanatics have also seen their market share grow, leading the remaining sportsbooks to fight for table scraps.
Things won’t be any easier in 2026 as the prediction market industry continues to grow. This means sportsbooks will be competing with even more operators to attract bettors. While Hodges didn’t cite this reason in her statements, it's likely the industry’s growth played a role in the decision to shut down.
Scandals Plagued Action 24/7
Trying to compete in sports betting as a small operator is hard enough, but Action 24/7 made it even harder.
A scandal was surrounding the operators even before their online platform went live. The platform is backed by Advance Financial, a payday loan lender. This led to fears that customers were trapped in a vicious cycle of taking out payday loans to pay off gambling debts from using the company’s sportsbook.
In March 2021, the Tennessee Lottery suspended Action 24/7’s license over fraudulent betting. It identified several instances of out-of-state bettors using proxies to place wagers. The regulator believed the operator ignored the warning signs, including bets being placed where the account name and the name on the credit or debit card did not match.
Sportsbook’s Failure is Good for the Industry
While Action 24/7 bemoaned the competitiveness of the sports betting industry, they won’t find much sympathy.
The sportsbook’s link to a payday loan vendor threatened to set an ugly precedent. The controversial industry borders on predatory lending, which led the rest of the US to reject their attempts to join the sports betting industry.
Not only did Tennessee allow Advance Financial to launch a sportsbook, but lawmakers also rejected legislation to ban it. That shows the political power lenders have, and how it can lead lawmakers to work against the public’s best interest.
Had the sportsbook succeeded, it could have led to a well-financed push to allow more payday lenders into the industry. While we don’t know the revenue Action 24/7 had seen, its reason for closing signals it wasn’t much. That makes the idea of pursuing a license a losing proposition for Advance Financial’s industry rivals.
