Sweepstakes casinos sued for law violations in New York

A class action lawsuit has recently been initiated in the U.S. District Court for the Southern District of New York, signifying a pivotal moment in the ongoing legal scrutiny of online sweepstakes casinos.

The complaint has been filed by Autumn Boatner, representing the interests of New York consumers, and targets a variety of well-known platforms, including Sportzino, Zula Casino, and Fortune Coins. These platforms are accused of contravening state gambling laws and consumer protection statutes.

Among the defendants are the operators of these online casinos and their Canadian parent companies, Blazesoft Ltd. and Blazegames Inc. Boatner contends that these entities are engaging in illegal gambling operations, cleverly masked as sweepstakes casinos to evade New York’s stringent gambling regulations.

The crux of the lawsuit centers around the assertion that these platforms implement a deceptive dual-currency system. Players purchase “Gold Coins,” which the companies advertise as merely for entertainment; however, these purchases simultaneously grant players “Sweepstakes Coins” or “Fortune Coins” that can be used in slot-style games and redeemed for cash. The lawsuit argues this structure cunningly allows real-money gambling to masquerade as legal.

Boatner further claims that the games offered—ranging from virtual slots to bingo—are fundamentally based on chance. This characteristic makes them unlawful under New York law whenever real money is involved. She asserts that the platforms lack the requisite licenses and promote their services through flashy and misleading advertisements on social media channels like Facebook, Instagram, and TikTok.

Another point of contention highlighted in the lawsuit is the accessibility of these platforms to users as young as 18, despite the legal gambling age in New York being set at 21. Additionally, the complaint argues that the companies neglect to provide adequate resources or disclosures pertaining to problem gambling, thereby heightening the risk for their users.

The suit also criticizes the implementation of “playthrough” requirements—rules that compel players to wager a certain amount before being eligible to withdraw any winnings. The lawsuit posits that such restrictions often entrap users in a cycle of continuous spending simply to gain access to their own winnings.

Boatner alleges she incurred losses exceeding $50 on each platform and is seeking to recover these losses under New York’s Loss Recovery Statute. Furthermore, she is pursuing claims of false advertising, deceptive business practices, and unjust enrichment.

The lawsuit seeks to certify a class of New York users who have either spent or lost money on these platforms. It calls for restitution, the forfeiture of illicit profits, and a court directive to cease operations.

This case is emblematic of a wider legal trend confronting the sweepstakes casino business model in the United States. For years, these enterprises have thrived within regulatory gray areas, exploiting loopholes such as dual currency schemes and “free-to-play” marketing claims. However, as the tide of litigation intensifies, significant changes to the legal landscape governing these platforms could be on the horizon.