Sweepstakes Casino & Poker provider VGW Faces Yet Another Lawsuit

Virtual Gaming Worlds (VGW), a notable player in the online sweepstakes casino and poker sector, is currently embroiled in a class action lawsuit in the state of Mississippi. The lawsuit alleges that VGW’s operations infringe upon regional gambling laws, mirroring a trend seen in similar legal actions against the company in various jurisdictions.

The plaintiff, Makayla Darrielle Saulny, is represented by legal counsel advocating for compensation related to losses sustained on VGW’s platforms from August 20, 2021, to the present. The basis for Saulny’s claim is rooted in a section of the Mississippi Code that allows individuals to recover funds lost to illegal gambling ventures.

Initially lodged in the Hinds County Circuit Court, VGW has successfully maneuvered to have the case transferred to the U.S. District Court for the Southern District of Mississippi. This strategy is consistent with VGW’s response to legal challenges, as the company has prioritized federal court for most of its legal disputes.

Moreover, VGW is currently defending itself against 11 federal lawsuits while its sweepstakes casino model faces heightened scrutiny from media outlets, law enforcement agencies, and regulatory bodies. This legal landscape reflects a broader trend in which multiple U.S. sweepstakes operators are facing similar lawsuits grounded in state laws regarding the recovery of historical losses on their platforms.

Worldpay Under Allegation

In a significant development, the class action against VGW in Florida has recently expanded its scope to include payment processor Worldpay as a defendant. An amendment to the original complaint, filed in August, asserts that Worldpay conspired with VGW to facilitate illegal gambling transactions. This claim positions Worldpay within the framework of violating Florida’s Unfair and Deceptive Trade Practices Act, alongside the Civil Remedies for Criminal Practices Act.

The lawsuit accuses Worldpay of “aiding and abetting” VGW’s alleged illegal operations by serving as its payment processing partner, thus highlighting the interconnected nature of payment processing in the gambling industry.

Recent Legal Precedents in Sweepstakes Casinos

Washington State

On June 1, 2023, the U.S. District Court for the Western District of Washington reached a landmark decision, approving a $415 million settlement against DoubleDown Interactive LLC and International Game Technology PLC. This settlement arose from allegations that DoubleDown had operated social casino games that constituted illegal gambling.

Alabama

A class action lawsuit was initiated on March 8, 2023, against Playtika in the U.S. Circuit Court of Franklin County, Alabama. The lawsuit claims that Playtika’s gaming offerings are tantamount to illegal gambling, seeking restitution for incurred losses. As the case is still in progress, no hearing date has been established.

Kentucky

In a case from 2022, Scientific Games Corp faced a class action lawsuit in the Eastern District of Kentucky, concerning allegations that its games qualified as illegal gambling. Although this case was dismissed in October 2022, another suit against VGW LuckyLand later settled for over $11 million, asserting violations of local gambling laws through its sweepstakes operations.

California

In another notable case, a $5 million class action lawsuit was filed on June 6, 2023, against Fliff in the U.S. District Court for the Central District of California. The lawsuit claimed that Fliff’s operations—characterized as a “free-to-play” social sportsbook—were in breach of California’s gambling laws.

The Regulatory Landscape of Sweepstakes Casinos

The rise of sweepstakes casinos in the U.S. online gambling arena has proceeded largely without regulation. In many states, these platforms are not classified strictly as gambling venues because they do not involve actual money wagers. However, as evident from the plethora of legal cases impacting VGW and its contemporaries, customers can purchase “Sweeps Coins” that enable gaming activities. These coins can later be exchanged for prizes or converted to cash, complicating the legal definitions of these operations.

It is crucial to note that only Washington and Idaho have enacted legislation that categorically defines sweepstakes casinos as a form of gambling, underscoring the urgent need for regulatory clarity in this evolving sector.