VGW Faces New Lawsuit in Connecticut

Sweepstakes provider VGW has been hit with yet another class action lawsuit in the United States as a resident in the state of Connecticut has filed legal proceedings against the company.

According to court documents filed in the Hartford Superior Court:

“VGW MALTA, VGW LUCKYLAND, and VGW GP claim to be video game development business entities and operators of a social casino”

However, the plaintiff notes that VGW’s claims that its social casino games were of a legal nature were false. The documents also include evidence provided by the Connecticut Department of Consumer Protection which consisted of records of VGW’s significant advertising expenditures.

Earlier this year, the Connecticut Department of Consumer Protection issued a cease-and-desist letter to VGW, accusing the company of engaging in illegal gambling activities. Although the department requested VGW cease its operations in February, it reports that the company only withdrew from the state in early October.

Prior to the cease and desist letter, Connecticut authorities had categorized VGW, the operator of Luckyland Slots and Chumba Casino, as an unlicensed online gambling operator.

Sweepstakes Industry Under Pressure

VGW’s legal battles aren’t limited to Connecticut. The company also faces ongoing litigation in Georgia, where it recently managed a small legal win. In Georgia, VGW successfully kept its gambling loss lawsuit within the jurisdiction of the Georgia federal court as opposed to the state court.

This progress marks a minor victory for the company, especially after a Tennessee judge had issued an order aiming to transfer similar sweepstakes lawsuits back to state courts. The nine cases involved stem from plaintiffs seeking to recoup gambling losses from sweepstakes operators. These lawsuits also target companies like DoubleDown, Playtika, Playstudios, SciPlay, and SpinX.

In August, VGW also withdrew from Delaware as pressure against the sweepstakes business model intensified.

The latest case means that VGW is currently battling 12 federal lawsuits. Several other U.S. sweepstakes providers have also faced lawsuits under similar state laws related to past losses on their platforms.

Sweepstakes Casinos Grey Area

While sweepstakes casinos argue that their products do not fall under traditional gambling, regulators have increasingly scrutinized their products and services, often classifying them as illegal gambling. In a recent statement, the American Gaming Association (AGA) called for a reassessment of the sweepstakes model’s legality.

A recent IGA webinar highlighted the regulatory ambiguity surrounding sweepstakes gaming, with AGA representatives describing the industry as a “legal gray area” that conflicts with the established, regulated gaming environment. AGA President Chris Cylke emphasized the industry’s concerns, stating that gaming regulators and stakeholders are monitoring this expanding market closely.

In the majority of states, sweepstakes casinos and online poker platforms aren’t classified as gambling, as no actual money is wagered. However, as shown by recent class actions against VGW and other operators, users can purchase “Sweeps Coins” on these sites, which can then be used for gameplay. These Sweeps Coins are redeemable for prizes and, in some cases, can be converted into cash.

The exceptions to this are Washington and Idaho, where specific laws define sweepstakes casinos as a form of gambling.

Olivia Richardson

Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.