The ultimate guide to social casinos

The Department of Consumer Protection in Connecticut has issued a suspension of license for High5Games, which it says also illegally operated another online casino. High5Games is a legal licensed service provider in the state of Connecticut - but in a recent investigation conducted by the DCP, it was found that High5Games also illegally operates High5Casino, which is unlicensed.

The Connecticut Department of Consumer Protection (Gaming Division) has submitted a suspension of the Online Gaming Service Provider license held by High5Games following an investigation that revealed the company was illegally operating another online casino which remains without a license, High5Casino.

High5Games, a licensed developer and provider of slot content for legal gaming platforms, was found to be running High5Casino without proper authorization. The platform was falsely marketed as a legally licensed casino and was also accepting wagers from Connecticut residents, including persons who had voluntarily signed up for the Voluntary Self-Exclusion List in the state.

Violation of Connecticut gaming laws

Connecticut law permits only two platforms to offer iCasino wagering within the state: DraftKings and FanDuel, which operate under agreements with Foxwoods Casino and Mohegan Sun, respectively. The DCP Gaming Division's investigation stated that High5Casino had accepted deposits from 1,100 players in Connecticut, with 911 individuals collectively losing $937,938. Alarmingly, 108 of these individuals were on the state's Voluntary Self-Exclusion List, and they lost nearly $300,000 on the illegal platform.

As a result of these violations, High5Games is now facing 1,065 criminal counts of illegal gaming activities. Each count is classified as a Class A misdemeanor under Connecticut law, carrying a maximum penalty of up to one year in jail as well as a fine of up to $2,000 per violation.

DCP pledges consumer restitution and enforcement

DCP has stated that it will seek compensation for eligible consumers who suffered financial losses due to the misleading marketing of High5Casino as a legitimate platform.

"Thank you to our Gaming Division team for their hard work to hold this licensee accountable," said Bryan T. Cafferelli, DCP Commissioner. He went on to say that holding a gaming license is a privilege, and they expect their credential holders to take that responsibility seriously. But High5Games took advantage of their credential to mislead consumers into believing they were engaging in legal gaming when, in reality, they were breaking the law. Furthermore, he stated: "We remind consumers that there are only two licensed online casinos in Connecticut - DraftKings/Foxwoods and FanDuel/Mohegan Sun. If you choose to participate in online gaming, ensure you use only these licensed platforms."

Kris Gilman, the DCP Gaming Division Director, echoed this sentiment, expressing disappointment that a licensed service provider exploited Connecticut consumers. "It is difficult to recover funds from illegal platforms," Gilman said. "Gambling on licensed platforms is the only way to guarantee recovered funds in the event of an issue with a game or platform."

Immediate suspension and removal of High5Games content

The suspension of High5Games' Online Gaming Service Provider license is effective immediately. Additionally, all games provided by High5Games to DraftKings and FanDuel will be removed from their platforms. A copy of the official summary suspension order has been made available to the public.

The DCP encourages consumers to report any gaming-related issues or concerns by contacting [email protected]. For individuals experiencing gambling-related issues, confidential support is available through the Connecticut Council on Problem Gaming's 24/7 Problem Gambling Helpline at 1-888-789-7777 or by visiting ccpg.org. Additional information about self-exclusion programs and resources for those struggling with gambling addiction can be found at portal.ct.gov/problemgaming or ct.gov/selfexclusion.

As regulatory authorities continue to uphold gaming laws in Connecticut, consumers are reminded to exercise caution and only engage with legally licensed online gaming platforms.

As more states place sweepstakes casinos under closer scrutiny, some online sweepstakes operators have already made their exit from certain states. Hello Millions and McLuck have exited the states of West Virginia and Maryland, and three other sweeps casinos have pulled out of Maryland as well, namely Mega Bonanza, Spree, and Jackpota.

The exodus of online sweepstakes casinos from West Virginia and Maryland continues, as regulatory scrutiny intensifies against the controversial gaming vertical. Leading brands like Hello Millions and McLuck have now added both states to their growing list of restricted territories, while three additional platforms - Spree, Mega Bonanza, and Jackpota - have officially ceased operations in Maryland as of February 21. These five brands now block users from a minimum of 12 US states.

The recent departures align with growing regulatory pressure in both states, as lawmakers and enforcement agencies take decisive action against online sweepstakes casinos. Maryland, in particular, is considering an outright ban, while West Virginia's Attorney General is reportedly investigating the industry's operations.

Maryland lawmakers push for ban following cease-and-desist orders

Senator Paul Corderman from Maryland has introduced Senate Bill 860 (SB860), which explicitly seeks to prohibit sweepstakes casinos. The bill defines these platforms as online gaming sites that employ a dual-currency system - one that utilizes both free and real money - mimicking the experience of traditional online casinos or lottery-style gaming. If passed, SB860 would criminalize not only sweepstakes operators but also service providers that support these platforms.

SB860 is set for a committee hearing on the 5th of March, with its House counterpart, House Bill 1140, scheduled for discussion the following day. The bill was introduced following a series of cease-and-desist letters issued by the gaming regulator of Maryland to several unauthorized online gambling operators, which included some offering sweepstakes-based gaming products.

The Maryland Lottery and Gaming Control Agency has confirmed that it issued a cease-and-desist order to McLuck but has not publicly disclosed enforcement actions against the other four brands that recently exited the state.

West Virginia investigates sweepstakes operators

On the other hand, West Virginia Attorney General JB McCuskey is reportedly leading a probe into the operations of multiple sweepstakes casinos. While specific details remain undisclosed, industry sources suggest subpoenas have been issued to several sweepstakes gaming companies as part of an ongoing investigation.

Mega Bonanza, one of the recently withdrawn brands, confirmed in a statement that it has ceased operations in Maryland but did not provide additional details regarding its decision or its standing in West Virginia. The state's regulatory authority has not yet commented on whether further enforcement actions are forthcoming.

Industry-wide retreat from US markets

The sweepstakes casino sector has been facing increased legal scrutiny across the US, leading to multiple market withdrawals beyond Maryland and West Virginia.

Just last week, High 5 Games, a major online gaming entity, announced it would shut down its operations in six states that currently have legal online casino gaming, which includes West Virginia. Similarly, Stake.US has also recently exited the Mountain State and several other jurisdictions.

Beyond these two states, the national outlook for sweepstakes casinos remains uncertain. Mississippi recently became the first state legislative body to approve a full ban on online sweepstakes gaming. Meanwhile, in New Jersey, lawmakers are exploring an alternative approach - proposing to regulate sweepstakes casinos under a framework similar to online casino gaming and sports betting.

What's next for sweepstakes gaming?

With mounting regulatory pressure, it is unclear how many more states will move to restrict or ban online sweepstakes casinos in the coming months. The industry, which has long operated in a legal gray area, is now facing an increasing number of legal challenges that could reshape its future in the US market.

For Maryland and West Virginia players who relied on these platforms for entertainment, the closures mark yet another shift in the rapidly evolving gaming arena. As legislative efforts and enforcement actions continue, the industry will closely monitor how these developments impact the wider regulatory environment for online gaming across the nation.

A recent class action lawsuit was filed against High 5 Games by players in the state of Washington who alleged that they lost money while playing the games on High 5 casino. A previous court ruling has classified High 5's social casino games as illegal gambling under state law, and the evidence submitted in court has claimed that High 5 Games has targeted players who spend more - including those with gambling addictions.

In a historic ruling, a Washington state jury has ruled against High 5 Games, indicating the first class action verdict to win against a social casino operator. The jury awarded $24.9 million in damages to consumers in Washington who lost money while playing the company's online casino games. This verdict follows a prior court decision that classified High 5 Games' social casino products as illegal gambling under the law of Washington state.

Social casino model deemed illegal

Social casinos operate by offering digital casino-style games and slot machines where players may buy virtual chips using real money. Although these chips hold no cash value whatsoever, plaintiffs argued that they functioned as gambling bets as players had to purchase more chips to continue their gameplay. Last year, a court found that High 5's social casino model breached Washington state gambling laws.

The jury determined that the customers of High 5 in Washington had lost almost $18 million through its games. In addition to this amount, the jury awarded $7 million in statutory damages, bringing the total payout to nearly $25 million.

Targeting high-spending users

During the trial, evidence presented in court revealed that High 5 Games specifically targeted high-spending users, often referred to as 'whales.' The company allegedly provided free chips to entice these players to continue playing. One of the most alarming revelations was that a player who had requested their account to be closed because of gambling addiction was instead offered incentives to keep playing.

This approach, combined with the financial losses suffered by Washington players, played a crucial role in the jury's decision.

A crucial moment for the social casino industry

The verdict against High 5 Games comes on the heels of multiple settlements in similar cases, where social casino operators have collectively paid more than $650 million in compensation to affected players. However, unlike other companies that opted to settle, High 5 Games chose to fight the allegations in court, ultimately leading to this significant jury verdict.

The ruling is expected to influence current litigation against major tech companies, including Meta, Amazon, Apple, and Google. These corporations allegedly profit from these social casinos because they process payments and collect transaction fees, positioning themselves as financial intermediaries in the industry.

Todd Logan of Edelson PC, the law firm that represents the plaintiffs, emphasized the implications of the case, stating: "Big Tech isn't just standing by - they're cashing in. This verdict is a milestone, but it's only the beginning."

High 5 Games expands amid legal battles

Despite its legal challenges, High 5 Games has continued its expansion in the US online gaming market. In July of 2024, the company arrived in West Virginia, marking its fifth regulated market in the country. Its gaming portfolio includes popular titles such as Da Vinci DeluxeWays, Green Machine Deluxe, and 88 Drums.

The outcome of this case could have far-reaching consequences for the social casino industry and the tech giants that facilitate its operations. With regulators and legal experts closely watching, this ruling may serve as a reason for further action against social casino operators and the platforms that support them.

As more lawsuits emerge and legal scrutiny intensifies, the industry faces mounting pressure to reassess its business practices and regulatory compliance, particularly in states like Washington that have taken a firm stance against social casinos operating in a legally gray area.