Borrow at 279%, gamble immediately
Imagine walking into a payday loan store, borrowing $4,000 at 279.5% interest and then depositing it into a gambling account – at the same counter. That’s what happened in Tennessee for more than five years, according to a ProPublica investigation.
279.5%Interest on loans
~80Payday loan stores
5+ yearsOperation duration
The players
According to ProPublica’s reporting, this is who was involved:
- Financial in advance: A Tennessee lender with approximately 80 storefronts, owned by Michael and Tina Hodges. Loans offered up to $4,000 at an annual interest rate of 279.5%.
- Action 247: An online sportsbook, majority owned by the same Hodges family. Launched in November 2020.
The scheme was simple: Brochures appeared in Advance Financial stores advertising a $2 fee to deposit borrowed money directly into Action 247 gambling accounts.
What regulators found
When the Tennessee lottery board discovered this scheme in December 2020, the response was immediately concerning. ProPublica reports that lottery board chairwoman Susan Lanigan stated that regulators were alarmed, noting that their licensing decision may have been based on an incomplete view of the company.
Why this is important: According to Brianne Doura-Schawohl, former legislative director of the National Council on Problem Gambling, combining high-interest loans with gambling is “unhealthy and predatory.” No other state allows high-interest lenders to own gambling operations and use storefronts to attract customers.
The political reaction
What happened next, according to ProPublica, followed a familiar pattern:
- March 2021: The lottery board has suspended Action 247’s license due to a lack of proper internal controls
- April 2021: Tennessee House Speaker Cameron Sexton — whose campaigns have received about $105,000 from Advance Financial over the past decade — met with the lottery board chairman and reportedly made it clear he was unhappy with the suspension
- May 2021: Sexton has passed legislation that would completely eliminate lottery oversight of sports betting and create a new agency
- April 2021: A bipartisan bill to ban lenders from offering gambling services — co-sponsored by nearly a third of the House of Representatives — was withdrawn after Advance Financial’s lobbyist opposed it.
The pattern: Supervisors are concerned. Politicians who have received donations intervene. Regulations are being weakened or removed. The predatory scheme continues. This is how consumer protection is being undermined.
Why payday loans and gambling are dangerous
Research consistently shows that problem gamblers have difficulty making financial decisions and are more likely to have significant debt. Putting a lender and a sportsbook under the same roof – owned by the same family – creates a pipeline from desperation to deeper debt.
The debt spiral
- Borrow at 279.5% interest to finance gambling
- Lose the gamble – as most people do
- Now the loan plus interest is due, with nothing to show for it
- Borrow again to cover the first loan or to chase losses
- Repeat until it is broken
The end
Action 247 announced its closure on January 16, 2026. Tina Hodges attributed the closure to the gambling market being unviable and unprofitable for all operators. Advance Financial’s 80 payday loan stores remain open.
Before you sign anything: If you are considering a personal loan, a high-interest loan, or any other financial product marketed alongside another service, run the contract through the Contract Decoder first. It’s free – and a 279.5% interest rate should never be anyone’s first option.
Sources
- ProPublica — Full investigative report on the Advance Financial/Action 247 scheme
Frequently asked questions
Is it legal to combine payday lending with gambling?
According to ProPublica reporting, no other state allows high-interest lenders to own gambling operations and use their storefronts to attract customers. The Tennessee Lottery Board tried to intervene, but was overridden by legislation that removed their oversight of sports betting.
How much interest does Advance Financial charge?
According to ProPublica, Advance Financial charges up to 279.5% annual interest on loans up to $4,000. These are commonly known as payday loans or high-interest installment loans.
What can I do if I’m stuck in my payday loan debt?
Debt traps for payday loans are real, but there are options. For legal questions regarding your specific situation, please contact an attorney licensed in your state. You may also want to explore all your debt relief options, including those that many people don’t consider.
Is Action 247 still active?
No. Action 247 announced its closure on January 16, 2026, citing a non-viable and unprofitable market for state-licensed online sports gambling.
TL; DR: ProPublica reveals that a Tennessee lender is charging a 279.5% interest rate, allowing customers to deposit borrowed money directly into a sports book owned by the same family. Regulators were alarmed, but were politically sidelined. The sportsbook closed in January 2026, but the payday lender’s 80 stores remain open. Debt is math – and 279.5% math always ends the same way.
(Source: ProPublica)
#Payday #Lender #borrowed #finance #gambling