Florida officials go on offensive over sweepstakes casinos
Florida Attorney General James Uthmeier has launched legal action against Stake and VGW, accusing some of the biggest names in the US sweepstakes casino market of operating illegal online gambling businesses.
Two lawsuits filed in Hillsborough County Circuit Court target Stake.us and VGW, the Australian gambling company behind Chumba Casino, LuckyLand and Global Poker.
The cases also target payment processors used by the sweepstake operators, potentially widening the impact of Florida’s action beyond the individual casino brands.
“These so-called ‘sweepstakes’ and ‘social casinos’ are illegal online gambling operations,” Uthmeier said.
“If it looks like a casino, takes real money like a casino, and pays out like a casino, it is a casino — and it is illegal under Florida law.”
Florida alleges the operators use dual-currency systems to disguise what amounts to real money online casino gambling.
Players typically purchase non-redeemable Gold Coins and receive a second currency, known as Sweeps Coins at VGW or Stake Cash at Stake, which can be wagered before eligible winnings are redeemed for cash or other prizes.
The state argues the redeemable currencies effectively operate as casino chips and that describing the platforms as sweepstakes or social casinos does not remove them from Florida gambling laws.
Uthmeier is seeking permanent injunctions preventing the companies from operating or soliciting customers in Florida, along with restitution, disgorgement of profits, civil penalties and the recovery of money lost by Florida players.
The Stake complaint also reportedly names company founders Ed Craven and Bijan Tehrani individually, along with entities including Easygo, Medium Rare and Kick Streaming. Payment companies Praxis Tech and Breeze Labs Payments are also defendants.
The VGW case names casino payment businesses including Trustly, Yodlee and Worldpay Holdco.
That element could prove particularly significant for the wider sweepstakes industry, with Florida attempting to hold companies facilitating payments responsible alongside the operators themselves.
Florida’s actions form part of a growing US crackdown on sweepstakes casinos, but the state is not relying on newly introduced legislation. Instead, the Attorney General is arguing that the dual-currency casino model already breaches existing Florida gambling and consumer-protection laws.
The allegations have yet to be determined by the court and the defendants will have the opportunity to contest them.
