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Mere months after Connecticut brought criminal charges to its sweepstakes casino platform, the state of Connecticut has agreed to a settlement with High 5 Games. With the settlement, High 5 Games has agreed to pay a fine of almost $1.5 million, and the Connecticut Department of Consumer Protection has also agreed to reinstate High 5 Games' provider licence - but not for its sweepstakes casino, High 5 Casino.

High 5 Games has regained its online gaming service provider license in Connecticut following a settlement with the state's Department of Consumer Protection. The agreement comes nearly three months after the company was hit with a summary suspension and criminal charges - the first of their kind in the US - over its operation of the unlicensed sweepstakes platform, High 5 Casino.

As part of the settlement, High 5 Games will pay a $1.5 million fine and has agreed to discontinue High 5 Casino's availability across Connecticut. The settlement is not considered an admission of liability or a violation of law. While High 5 Games has been licensed in Connecticut since 2021 to supply content to regulated operators such as DraftKings and FanDuel, the company's separate sweepstakes platform, High 5 Casino, was operating without state approval.

DCP investigation reveals sweeps violations

The DCP's six-page Assurance of Voluntary Compliance, dated May 22, outlined how High 5 Games violated two state statutes by running the unlicensed casino for 25 months. During that time, more than 1,000 Connecticut customers deposited over $3.1 million into the platform.

Though High 5 Games informed regulators in February of its intention to exit the state, investigators found that the casino remained accessible to users via simple geolocation workarounds. The platform's dual-currency model, a hallmark of sweepstakes operations, allowed users to collect free 'virtual coins' while also purchasing 'virtual cash' redeemable for real-money prizes - a structure that has drawn criticism from consumer protection advocates nationwide.

Consumer restitution and compliance measures

Under the settlement terms, High 5 Games will pay $643,000 in restitution to affected consumers and contribute nearly $800,000 toward consumer protection efforts, including education, complaint resolution, and enforcement.

In addition to financial penalties, the company agreed to enhance geofencing technology to block users within Connecticut and to prevent access via VPNs and proxy servers. The agreement also prohibits the reintroduction of any sweepstakes platform in the state unless it complies with applicable licensing regulations. "This case is just one example of the hard work our gaming division does to ensure a fair, safe, and legal gaming market in Connecticut," said Commissioner Bryan Cafferelli. "We appreciate High 5 Games' cooperation in bringing this matter to a resolution."

Wider legislative push against sweepstakes casinos

Connecticut's action against High 5 Games has contributed to a growing national spotlight on sweepstakes casinos, which critics argue exploit regulatory loopholes. For instance, earlier last month, Montana became the first state to outright ban such platforms. In Louisiana, legislation aimed at closing the same loopholes has advanced to a third reading in the House of Representatives.

Connecticut lawmakers are also responding swiftly. On 23 May, the Connecticut Senate unanimously passed a bill to prohibit unregulated sweepstakes casinos; the measure now awaits a vote in the House before the legislative session ends next week.

The DCP's unprecedented move in March to bring criminal charges against a sweepstakes casino operator set a national precedent and sent a clear message to others in the sector. While High 5 Games has resumed its role as a licensed content supplier in Connecticut, the resolution of this case highlights growing regulatory momentum against unlicensed gambling operators. High 5 Games Chief Executive Officer Tony Singer has not publicly commented on the settlement. However, in a previous statement, the company said it was committed to cooperating with regulators and maintaining the integrity of its licenses.

Sweepstakes platform VGW – owner of LuckyLand Slots, Chumba Casino, and Global Poker – has announced that it is pulling out of New York, and it is a decision that it didn’t take lightly. Beginning on the 2nd of June, New York players will no longer be able to purchase Gold Coins, participate in contests, and the like. The remaining Sweeps Coins in players’ accounts can still be used until July 2, and on August 1, the redemption of Sweeps Coins will no longer be possible.

In a significant move for the online social casino industry, VGW - the powerhouse behind Global Poker, Chumba Casino, and LuckyLand Slots - has announced it is phasing out its sweepstakes operations in New York. While the company will continue offering its free-to-play Gold Coin games, Sweeps Coin functionality is being systematically wound down over the coming months.

Sweeps Coins to be discontinued starting June 2

VGW stated that New York players have already been notified of the decision via email. Beginning June 2, players will no longer be able to acquire Sweeps Coins through any means - including daily logins, contests, Gold Coin purchases, or mail-in entries. However, existing Sweeps Coin balances can still be used for gameplay until July 2.

From July 2, gameplay using Sweeps Coins will be fully disabled, and any new mail-in requests will no longer be processed. By August 1, the ability to redeem any remaining Sweeps Coins for prizes will be permanently discontinued.

A VGW spokesperson emphasized that players in New York will still have access to their favorite games using Gold Coins, which are entirely free-to-play and remain unaffected by the regulatory concerns driving the decision. “We are 100 percent focused on ensuring players are fully informed about the changes, and that this transition is as smooth and seamless as possible,” said the spokesperson.

A decision made in the best interests of all stakeholders

VGW acknowledged the significance of this decision, particularly for long-time players in New York. “We understand this is an adjustment after many years, and some players may be disappointed,” said the spokesperson. “This decision wasn’t taken lightly and was made at this time in the best interests of all our stakeholders.”

This move reflects the company’s ongoing strategy to align with evolving expectations around regulatory compliance. In February, VGW raised its minimum player age from 18 to 21, citing a commitment to safe and responsible gaming. The New York exit follows that same philosophy.

“VGW has operated in North America for more than a decade, creating not only great games, user experiences and entertainment but ensuring this is done safely, responsibly and at the highest level of standards,” the company said.

Regulatory clouds prompt sweeps retreat

VGW is not the first sweeps operator to leave the Empire State. Other major platforms, including High 5 Casino, McLuck, Hello Millions, and Funzpoints, have also exited the market in recent months.

The trend coincides with increased legislative scrutiny. In March, Senator Joseph Addabbo introduced a bill to ban online sweepstakes casinos in New York. While that bill has seen little movement since April 30, and a duplicate Assembly Bill is only just entering committee on May 28, the industry has already begun to act preemptively.

VGW is not a member of the Social and Promotional Games Association, which has advocated for regulatory clarity and held conversations with New York officials. However, the company is part of the newer Social Gaming Leadership Alliance, which shares similar goals around responsible growth and engagement with lawmakers.

“As we’ve previously said, we acknowledge increased interest in our innovative industry that millions of Americans enjoy,” VGW said. “We are committed to respectful engagement on establishing modern, appropriate regulatory structures that benefit players and states alike.”

Social gaming remains viable in New York

More importantly, VGW’s Gold Coin-based social casino gaming will continue to be available to New York players. Unlike Sweeps Coins, which can be redeemed for real-world prizes, Gold Coins are purely for entertainment and fall outside the regulatory gray areas affecting sweepstakes promotions.

Although New York has not yet enacted new laws restricting these platforms, VGW’s decision demonstrates a growing sense of caution and strategic foresight within the industry. For now, the departure of VGW - the largest and most recognized sweepstakes operator in the US - marks a pivotal moment. But one thing is clear: the industry is preparing for change, and VGW is intent on leading the transition with transparency and responsibility.

Well-known operators of social games have gathered together and formed a gaming alliance in response to the ongoing scrutiny into sweepstakes gaming operations. The group, called the Social Gaming Leadership Alliance, is set to push for more friendly rules and regulations in the social gaming industry. It is led by former congressman Jeff Duncan, and he is joined by major players like VGW (Virtual Gaming Worlds), Yellow Social Interactive, B-Two Operations, ARB Interactive, and PLAYSTUDIOS.

A collective of prominent social gaming operators has come together to form the Social Gaming Leadership Alliance, a newly established advocacy group aimed at addressing mounting regulatory challenges and shaping a sustainable future for the industry. The coalition will be led by former US Congressman Jeff Duncan, and its founding members include Virtual Gaming Worlds (VGW), Yellow Social Interactive, PLAYSTUDIOS, B-Two Operations, and ARB Interactive, along with payment provider Nuvei.

The SGLA marks a significant step for the social gaming industry as it seeks to better educate lawmakers, regulators, and the public about the nature of its platforms and practices.

Promoting standards and clarifying misconceptions

Laurence Escalante, Chief Executive Officer of VGW, emphasized the importance of unifying under one voice to promote transparency and industry best practices. “Online social gaming is a well-established, popular form of entertainment in North America, where we’ve operated for more than a decade,” said Escalante.

“As a pioneer and market leader, we recognize the rising interest in our sector and our responsibility to both ensure the facts about our games, operations, and standards are understood and advocate for what we believe the appropriate industry frameworks should look like,” continued Escalante.

The coalition aims to develop and promote clear, consistent industry standards to help lawmakers and regulators differentiate social gaming from other forms of online gambling.

Core principles guide the SGLA's mission

The SGLA will be grounded in four core principles:

1. Free-to-play options - Ensuring players can enjoy games without spending money.
2. Responsible Gaming - Promoting player well-being and sustainable gameplay practices.
3. Player and platform protection - Upholding data privacy and ensuring secure, fair gameplay environments.
4. Age Restrictions - Enforcing strict age verification processes to keep minors from accessing gaming content.

By aligning on these values, the alliance hopes to present a united front when advocating for balanced regulations and preserving innovation in the sector.

Response to mounting legal pressure

The creation of the SGLA comes at a pivotal time for the social gaming industry, which has increasingly come under scrutiny from state regulators. VGW and several other sweepstakes operators have recently faced cease and desist orders in states such as Connecticut, Michigan, Idaho, Montana, Washington, and Nevada.

In one high-profile development, VGW made the decision earlier this year to shut down its Global Poker brand in Nevada, citing increased regulatory pressure. Gold Coin sales were discontinued in January, and customer accounts were fully closed by mid-April. This climate of uncertainty has spurred leading operators to organize and present a coordinated effort to protect the viability of their businesses and the enjoyment of their users.

Competing visions within the industry

The SGLA’s formation also highlights a growing divergence within the social gaming sector. Another industry group, the Social and Promotional Gaming Association, was launched in September 2024 with a focus on opposing legislative efforts that seek to curtail sweepstakes and other social gaming models.

While both groups aim to defend the social gaming space, their approaches and priorities appear to differ. The emergence of multiple advocacy organizations suggests an evolving and increasingly complex regulatory environment, as operators navigate differing interpretations of how social gaming should be governed.

The SGLA plans to begin an outreach campaign targeting lawmakers, regulatory agencies, the media, and the general public, advocating for informed and balanced policy decisions that allow the industry to flourish while protecting consumers. With seasoned leadership and backing from influential stakeholders, the alliance hopes to shape the narrative around social gaming and prevent overly restrictive laws that could stifle innovation.