Chumba Casino operator currently defending 11 federal cases
Online sweepstakes casino and poker developer Virtual Gaming Worlds (VGW) is now facing a class action lawsuit, in the state of Mississippi. Like all its many predecessors, the latest class action once again alleges that VGW’s sites are in breach of local gambling laws.
The attorney representing plaintiff Makayla Darrielle Saulny argued that Australian-owned VGW should reimburse her and any other Mississippi customers for all losses incurred on the company’s platforms during a three-year period from August 20th, 2021.
Similar to other lawsuits VGW has faced in different jurisdictions, Saulny’s suit is based on a section of the Mississippi Code that permits individuals to recover money lost on wagers with illegal gambling operators.
Initially filed in the Circuit Court of Hinds County, VGW successfully moved the case to the US District Court for the Southern District of Mississippi.
VGW, the operator of Luckyland Slots and Chumba Casino, has consistently sought to transfer cases to federal courts in most of its legal disputes.
Recently, VGW appealed a Tennessee federal judge’s order that remanded a case to state court, taking the matter to the Sixth Circuit.
VGW is currently defending 11 federal cases, as its sweepstakes casino model faces increasing scrutiny from media, law enforcement, and regulatory bodies. Many US sweepstakes providers have also been sued under similar state laws for historical losses on their platforms.
Worldpay Next in Firing Line
The class action against VGW in the state of Florida has named payment processor Worldpay as a defendant. The original complaint was amended in August of this year to include Worldpay.
The amended complaint states:
“Due to its actions of conspiring with VGW to conduct illegal gambling transactions, [Worldpay] is subject to suit for violations of Florida’s Unfair and Deceptive Trade Practices Act (Section 849.094 and Section 501.201 et seq); and Civil Remedies for Criminal Practices Act.”
Suit alleges Worldpay “aided and abetted” VGW’s illegal gambling business by acting as its payment processing partner.
Previous Sweepstake Casino Lawsuits
Washington
On June 1st, 2023, the U.S. District Court for the Western District of Washington approved a $415 million settlement against DoubleDown Interactive LLC and International Game Technology PLC. DoubleDown had been accused of running social casino games as “illegal gambling”.
Alabama
On March 8th, 2023, a class-action lawsuit was filed against Playtika in the U.S. Circuit Court of Franklin County, Alabama, claiming that its games qualify as “illegal gambling” and seeking compensation. The case remains ongoing, with no hearing date currently scheduled.
Kentucky
In 2022, a class-action lawsuit was filed against Scientific Games Corp in the U.S. District Court for the Eastern District of Kentucky, alleging that its games constituted “illegal gambling” and seeking payment recovery. The case was dismissed in October 2022.
Later that year, a separate class-action lawsuit against VGW LuckyLand in the U.S. Circuit Court of Kentucky was settled for over $11 million. The suit claimed that the company’s sweepstakes activities violated local gambling laws.
California
On June 6th, 2023, a $5 million class-action lawsuit was filed in the U.S. District Court for the Central District of California against Fliff, the operator of a “free-to-play” social sportsbook and sweepstakes website. The lawsuit claimed that Fliff’s sweepstakes activities violated local gambling laws.
Sweepstakes Casinos Unregulated Operations
Sweepstakes casinos have become quite prevalent in the US online casinos industry and for the most part operated with no regulation.
In most states, sweepstakes casinos and online poker sites are not considered gambling because no real money is wagered. However, as highlighted by the class actions taken against VGW and other operators, customers can buy “Sweeps Coins” on these sites, which can then be used for gambling. Sweeps Coins can later be exchanged for prizes and, in some instances, converted into cash.
The only two states where this is not the case are Washington and Idaho. Both states have enacted specific legislation that classifies sweepstakes casinos as a form of gambling.
