What’s Next for Sweepstakes Casinos? The Latest Lawsuit to Rip the Sweepstakes Casino Foundation Wide Open

There has always been a thin line between sweepstakes casinos (also known as sweeps casinos) and social casinos, and this line has been blurred even further, it seems like. Sweepstakes casinos have been increasingly popular in recent years, and they have distinguished themselves from social casinos, an ordinarily free service, by offering what is known as ‘sweeps coins’ in exchange for cash and more sweeps coins. The proponents of sweeps casinos say that they are only another form of social casino in that they just give players more (and better) rewards – but their opponents argue that sweepstakes casinos have managed to go through a legal loophole and are, in essence, cheating the public and lawmakers alike because they are not licensed or regulated like standard or real money online casinos.

A lawsuit to end all sweepstakes casino lawsuits

And now, just recently, a person named Julian Bargo filed a class action lawsuit against major sweepstakes casinos such as High 5 Casino, CrownCoins Casino, WOW Vegas, and McLuck, and the lawsuit also named two other new defendants, namely Apple and Google. The lawsuit claimed that the tech giants facilitated illegal gambling in conjunction with the four sweepstakes casino operators, and it accuses these companies of distributing illegal gambling software through cell phones and computers and other devices.

While sweeps casinos have faced their share of lawsuits and are no stranger to the long arm of the law, primarily brought about by disgruntled individuals who claim that sweepstakes casinos are unlawful and make it hard for people to claim their winnings through the sweeps coins method, this is actually the first time Apple and Google were named in a lawsuit. The lawsuit alleges that Julian Bargo has lost more than $1,000 through the 4 sweepstakes casino platforms, but what differentiated this lawsuit from others is that all the defendants were said to be in violation of the RICO Act. The RICO Act, short for the Racketeer Influenced and Corrupt Organizations Act, is a federal ruling that is designed to fight against organized crime by targeting ongoing patterns of illegal activity within different organizations.

The accusation against Google and Apple

So what does Google and Apple have to do with the lawsuit and the losses suffered by individuals in sweepstakes casinos? Well, the lawsuit claims that Google and Apple, through the Google Play Store and the App Store, respectively, have processed illegal payments between the 4 different defendants – and, more than this, have taken a significant portion of the proceeds as well.

The lawsuit further states that the defendants have misled regulators about the “true nature” of their business operations for a long time. It notes that these operators are not in any way “licensed,” and thus are not regulated by any casino authority, unlike traditional casinos. Moreover, the defendants are said to have “managed to insulate themselves from civil liability by hiding behind an iron curtain of bizarre arbitration agreements, many of which require arbitration in far flung locales like Malta, the Isle of Man, etc.”

The lawsuit is particularly timely and relevant because it was filed after various legislators and lawmakers pushed against sweepstakes casinos, seeking to ban them through the Model Internet Gaming Act. This Act, which was drafted by the National Council of Legislators from Gaming States just last November 26, 2024, states in Chapter 20 that sweepstakes games are prohibited, and it stresses that “It shall be unlawful for any person or entity to operate, conduct, or promote sweepstakes games within the state.” Furthermore, there is a second provision which notes, “It shall be unlawful for any person or entity to take any action to support or assist in the operation, conduct, or promotion of sweepstakes games within the state.” The proposed legislation also includes penalties for the operators of sweepstakes casinos ranging from $10,000 to up to $100,000 for each offence as well as up to two years’ prison time for those who have been found to repeat the offence.

The crackdown on sweepstakes casinos

If you recall, all of these crackdowns on sweepstakes casinos follows the issuance of several cease-and-desist letters to sweepstakes casino operators in the last year, including VGW Holdings, a prominent operator known for LuckyLand Slot and Chumba Casino, which was asked to stop operating in Connecticut. The company also had to cease operations in Montana, Washington, Michigan, Idaho, and Quebec in Canada. VGW Holdings currently offers the largest sweepstakes casinos in the US, and its sweepstakes casinos are still active in a good number of states, even Delaware, which sent its own cease and desist letter more than a year ago (February 2023) but which the sweepstakes casino operator continues to ignore.

Along with this, the American Gaming Association was the first to issue a memo which called for sweepstakes sports operators to comply with the law. It stated that because of the lack of regulatory oversight, the current sweepstakes platforms pose significant risks to consumers and even challenge the integrity of the market. The Association was quick to add that the sweepstakes operators have weak responsible gaming protocols and do not offer any robust processes for self-exclusion, either.

In response, the sweepstakes sector came up with its own trade authority just a couple of months ago named The Social and Promotional Gaming Association. The founding members include Blazesoft, High 5 Entertainment, Kickr Games, FSG Digital, Gold Coin Group, Octacom, Woopla Gaming, Rolling Riches, and more. The Association’s role is to make sure that sweepstakes casinos follow strict standards to continue operating.

What’s next for sweepstakes casino gaming?

At the end of the day, we believe sweepstakes casino operators are bound to tread more lightly in the next months, especially as they come under stricter regulatory scrutiny. But it seems that sweepstakes operators are beginning to take action, too, and they are realizing that they have to take measures to ensure that the general public’s perception of them doesn’t change. Right now, the public is still forgiving and does not yet have a negative view of sweepstakes casinos. But that could well change in the coming months, what with this new lawsuit naming Google and Apple as their co-defendants.

As we all know, the tides of casino gaming are evolving, and all we can do is speculate - and wait for the next chapter in an industry that’s as ever-changing and dynamic as ever.