New Jersey resident Julian Bargo recently filed a lawsuit in the New Jersey District Court after he lost more than $1,000 on various sweepstakes casino platforms. The suit accuses sweepstakes operators McLuck, High 5, Wow Vegas, and CrownCoins of running illegal gambling platforms.
However, Bargo also named Apple, Apple Pay, Google, and Google Pay in the suit, arguing they support the existence of these casinos under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The act defines an enterprise as “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” RICO charges are typically reserved for organized crime. However, the plaintiff argues they're applicable in this case.
Bargo argues the companies are part of the problem, because they receive a cut of the profit from social casino apps they house in their stores, namely the App Store and the Google Play Store. While other sweepstakes suits have named payment processors as defendants, this is the first case involving these two tech giants.
Cracking down on unregulated platforms
The plaintiff suggests sweepstakes casinos disguise themselves as social casinos but operate as unregulated online casinos.
“The Gaming Defendants have succeeded in misleading regulators about the true nature of their operations for far too long,” the complaint reads.
While social and sweepstakes casinos are typically unregulated, certain regulators have taken action against this form of gambling. For instance, the Michigan Gaming Control Board (MGCB) recently issued a cease-and-desist order to the sweepstakes lottery provider One Country. Sweepstakes casino provider Virtual Gaming Worlds (VGW), which runs Chumba Casino, LuckyLand Slots, and Global Poker, also had to exit Michigan last year amid the statewide crackdown.
The American Gaming Association (AGA) also called for stricter oversight. In August, the AGA wrote a memo stating:
“Gaming regulators and state attorneys general should investigate companies or platforms that offer casino games or a form of sports betting under the ‘sweepstakes’ model to determine whether or not these operators are in compliance with their respective laws and regulations and take appropriate action if not.”
The Sports Betting Alliance (SBA), which includes DraftKings, BetMGM, FanDuel, and Fanatics, also said it stands with the Indian Gaming Association (IGA) in its fight against sweepstakes gaming.
What are sweepstakes casinos?
Sweepstakes casinos offer casino games such as slots, blackjack, and roulette that players can enjoy without making a real money deposit. However, they often encourage bettors to spend money on extra virtual currency, which is how the plaintiff lost actual money in this instance. In 2023, VGW reported $4 billion in revenue.
With only seven U.S. states offering legal real money online casinos, sweepstakes sites provide an attractive alternative to players located outside of Rhode Island, Pennsylvania, Michigan, West Virginia, Connecticut, Delaware, and New Jersey.
