A $50,000 political donation linked to Advance Financial brings renewed scrutiny to the lender’s connections in Tennessee politics, including past ties to the Flex Loan law, the Action 24/7 sportsbook venture, and legislative influence.
By Kelly Jackson
A recent $50,000 political contribution tied to Nashville-based lender Advance Financial has revived attention on a network of political relationships that has already drawn national scrutiny.
The donation was made to Team Tennessee PAC, a political committee founded by longtime Republican political strategist Ward Baker, who has also served as a campaign manager for U.S. Senator Marsha Blackburn. While the PAC has already drawn attention for receiving a significant portion of its funding from donors outside Tennessee, this contribution came from inside the state—from a corporate network that has previously been at the center of one of the most controversial intersections of business and politics in Tennessee in recent years.
Advance Financial, founded by Michael and Tina Hodges, operates dozens of storefront lending locations across Tennessee and several other states. The company is best known for its “Flex Loan,” a lending product created under Tennessee law that can carry annual interest rates approaching 279.5 percent.
The loan product traces back to legislation passed in 2014, when Tennessee lawmakers approved the creation of a new type of open-ended credit product known as a Flex Loan. The legislation had support from lawmakers including House Speaker Cameron Sexton, and the product quickly became a cornerstone of Advance Financial’s business model.
Years later, the company expanded beyond lending and into the sports betting market after Tennessee legalized online wagering.
The Hodges launched a sportsbook called Action 24/7, hoping to compete with national brands such as FanDuel and DraftKings. But the company’s approach to operating the sportsbook quickly raised concerns among regulators.
Customers could walk into an Advance Financial storefront, borrow thousands of dollars through the company’s lending program, and then deposit that same money into an Action 24/7 sports betting account—often at the same counter.
In many states, gambling regulators prohibit lending companies from operating gambling businesses or allowing borrowed funds to be used for betting. Tennessee law, however, contained no such prohibition.
From late 2020 through early 2021, the arrangement operated openly. A customer could walk into one of Advance Financial’s locations, borrow up to $4,000, and then instruct the employee at the counter to deposit money directly into an Action 24/7 account for wagering.
The situation eventually drew the attention of the Tennessee Education Lottery Corporation, which oversaw sports betting in the state at the time.
In December 2020, investigators discovered brochures inside Advance Financial stores advertising the ability to deposit and withdraw sports betting funds through the lending locations. Regulators warned the company that its license might have been granted based on an incomplete understanding of its business model.
Officials soon discovered they had limited authority to intervene. Although regulators found the arrangement troubling, no specific Tennessee law prohibited it.
Still, investigators continued examining the company’s compliance with gambling rules and in March 2021 the lottery board voted to suspend Action 24/7’s license over regulatory violations. A judge later allowed the company to continue operating while the investigation proceeded.
At that point, the controversy moved from regulators to the legislature.
According to reporting by ProPublica and the Tennessee Lookout, House Speaker Cameron Sexton met with members of the lottery board shortly after the suspension and expressed frustration over the decision.
At the same time, Sexton was sponsoring legislation that would remove the lottery’s authority over sports betting entirely.
The proposal moved quickly through the legislature.
Within months, lawmakers passed legislation creating a new regulatory structure for sports betting, effectively stripping oversight from the lottery board and replacing it with a new entity.
The move also ended the lottery’s investigation into Action 24/7.
Sexton denied any wrongdoing and described the regulatory change as a broader policy decision about how sports betting should be governed in Tennessee.
But the story did not end there.
Investor documents later obtained by reporters showed that the Hodges’ sportsbook venture included investors with direct ties to Tennessee political leadership.
Among them were Ward Baker, a longtime Republican strategist who has worked for both of Tennessee’s U.S. senators and now manages political operations for Senator Blackburn, and John “Chip” Saltsman, who served as senior campaign adviser to Speaker Sexton when he became House Speaker.
Meanwhile, an effort by lawmakers to close the loophole allowing payday lenders to operate sports betting businesses struggled to gain traction.
Former state Representative Darren Jernigan introduced bipartisan legislation that would have prohibited the practice. The proposal attracted support from nearly one-third of the Tennessee House and was co-sponsored by lawmakers from both parties.
But the bill soon faced heavy lobbying pressure. According to Jernigan, lobbyists working on behalf of the Hodges’ companies contacted lawmakers urging them to withdraw their support.
After repeated delays in committee, the bill was withdrawn before reaching a vote.
The loophole remained.
Action 24/7 ultimately shut down its sportsbook operations earlier this year after failing to compete with national betting companies. The lending business behind it, however, remains active.
Now the $50,000 contribution to Team Tennessee PAC has placed the company’s political network back into the spotlight.
Large political donations from regulated industries are not unusual. Companies whose business models depend on legislative decisions often maintain close relationships with policymakers whose decisions shape the regulatory environment in which they operate. Until federal lawmakers as well as lawmakers in all 50 states decide taking lobbyist money is going to be illegal moving forward, this is the reality grassroots activists experience every session.
But when those industries have already been involved in legislative controversies tied to political relationships, those contributions can attract closer scrutiny.
The new donation connects a familiar set of names: the owners of Advance Financial, a political committee founded by an investor in the company’s former sportsbook venture, and a political network that has already intersected with lending laws and sports betting regulation in Tennessee.
The contribution may be perfectly legal. Political donations often are. But legality is not the only standard voters care about. When the same company that benefited from past legislative decisions continues to fund political committees connected to the state’s most powerful political figures, the issue is no longer just campaign finance. It becomes a question of judgment—both for those writing the checks and for the politicians willing to cash them.
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