Sweepstakes Casino Operator VGW Faces Illegal Gambling Lawsuit in Georgia

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Online social casino and poker game developer VGW is facing a class action lawsuit in the state of Georgia alleging that its sites operating in the state are in breach of local gambling laws.

According to the suit, which was filed in the U.S. District Court for the Northern District of Georgia, the Plaintiff alleges that she lost around $1,150 when playing games of chance on VGW’s websites that are legally available in the state.

Class Action Details

• Plaintiff: Destiny Kennedy
• Named Defendants: VGW Holdings Limited, VGW Malta Limited, VGW Luckyland Inc. and VGW GP Limited
• Class Action Summary: Kennedy alleges that VGW is breaching Georgia law by operating and promoting the online gambling sites Chumba Casino, Global Poker, and LuckyLand Slots within the state.
• Case Number: Case No. 1:24-cv-02184
• Court: U.S. District Court for the Northern District of Georgia

Plaintiff Destiny Kennedy alleges that while the sites listed in the lawsuit do not allow wagers using cash, they are still in breach of local gambling laws which prohibit online casino games or games of chance.

The lawsuit states that VGW misrepresents it services with various statements in its marketing including claiming that the social casino games on the site are “just for fun gameplay”. However, Kennedy claims that this is inaccurate as customers are expected to purchase virtual coins and, as a result, suffer financial losses when they don’t win games.

“VGW proactively defrauds Georgia citizens because VGW advertises that its operations are legitimate and legal when, in reality, VGW knowingly and willfully operates what constitutes an illegal gambling enterprise.”

The suit alleges that VGW is guilty of violating Georgia Code § 13-8-3. This code states:

A. Gambling contracts are void; and all evidences of debt, except negotiable instruments in the hands of holders in due course or encumbrances or liens on property, executed upon a gambling consideration, are void in the hands of any person.

B. Money paid or property delivered upon a gambling consideration may be recovered from the winner by the loser by institution of an action for the same within six months after the loss and, after the expiration of that time, by institution of an action by any person, at any time within four years, for the joint use of himself and the educational fund of the county.

Kennedy has demanded a jury trial and requests monetary relief for herself and any class members.

Sweepstakes Casinos Gray Area

Sweepstakes casinos currently operate legally in most U.S. states with the exception of Washington State and Idaho. Both states have specific legislation that classes sweepstakes casinos as a form of gambling.

Since neither state has a regulated online casino market, sweepstakes casinos are not permitted to operate.

In other states, Sweepstake casinos are not classified as gambling since no real money wagers take place. However, as this class action points out, customers are permitted to purchase Sweeps Coins through the sites which they can then gamble with. Sweeps Coins can then be exchanged for prizes and, in some cases, exchanged for cash.

This has led to social casinos operating in a legal gray area where operators presume that no gambling license is required.

Sweepstake Casino Lawsuits in Other States

Washington

On June 1, 2023, the U.S. District Court for the Western District of Washington approved a $415 million settlement against DoubleDown Interactive LLC and International Game Technology PLC. The operators of social casino games were accused of running these games as “illegal gambling.”

Alabama

On March 8, 2023, a class-action lawsuit was filed against Playtika in the U.S. Circuit Court of Franklin County, Alabama, alleging that its games constitute “illegal gambling” and seeking recovery payments. The suit is still in the system with no scheduled date for hearing.

Kentucky

In 2022, a class-action lawsuit was filed against Scientific Games Corp in the U.S. District Court for the Eastern District of Kentucky. The lawsuit alleged that the company’s games should be classified as “illegal gambling” and sought recovery of payments. The case was dismissed in October 2022.

At the end of 2022, another class-action lawsuit against VGW LuckyLand was settled for over $11 million in the U.S. Circuit Court of Kentucky. The lawsuit alleged that their sweepstakes activities violated local gambling laws.

California

On June 6, 2023, a $5 million class-action lawsuit was filed in the U.S. District Court for the Central District of California against Fliff, the operator of a “free-to-play” social sportsbook and sweepstakes website. The lawsuit alleged that the sweepstakes activities violated local gambling laws.

Based in London, Natasha is a former sports journalist with experience working for some of the biggest athletes & brands in the world of sports and iGaming.