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.
- Relevant Legal Code: Georgia Code § 13-8-3
- 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, Sweepstakes casinos and online poker sites 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.
VGW, a popular sweepstakes casino operator, is currently facing legal troubles in the state of Georgia. The company, known for its online gaming platform that offers players the chance to win real cash prizes through virtual sweepstakes, is being accused of operating an illegal gambling operation in the state.
The lawsuit, filed by the Georgia Attorney General’s office, alleges that VGW’s sweepstakes casino violates state gambling laws by allowing players to wager real money on games of chance. According to the complaint, VGW’s virtual currency, known as “Gold Coins,” can be purchased with real money and used to play casino-style games such as slots, blackjack, and poker.
The Attorney General’s office argues that because players can purchase Gold Coins with real money and potentially win cash prizes, VGW’s sweepstakes casino constitutes illegal gambling under Georgia law. The lawsuit seeks to shut down VGW’s operations in the state and recover any profits made from the alleged illegal gambling activities.
VGW has defended its business model, claiming that its sweepstakes casino is legal under federal law and operates in compliance with all relevant regulations. The company argues that its games are based on skill rather than chance, and that players can participate in the sweepstakes without making a purchase.
This legal battle between VGW and the state of Georgia highlights the ongoing debate over the legality of online sweepstakes casinos. While some states have explicitly legalized and regulated online gambling, others have taken a more restrictive approach, viewing these platforms as a form of illegal gambling.
As the case unfolds in Georgia, it will be interesting to see how the court ultimately rules on the legality of VGW’s sweepstakes casino. In the meantime, players and industry observers alike will be watching closely to see how this legal dispute may impact the future of online gambling in the state and beyond.
