VGW scored a victory in a key Florida class action case as several state legislatures mull potential sweepstake casino bans.
VGW scored a victory in a key Florida class action case, as several state legislatures mull potential sweepstake casino bans.
The leading sweepstakes casino operator was able to convince the court to reject the plaintiff’s request to remand the case to state court, where litigants face much lower hurdles to success.
The case, Knapp v. VGW Holdings, is one of many class action lawsuits the business is defending against and is widely thought to be the most advanced in its timeline.
Judge Carlos E Mendoza’s ruling said: “Because the amount in controversy and the numerosity requirements are clearly stated in the notice of removal and supporting declaration … the Court finds that it has subject matter jurisdiction over this action.”
The legal dispute will be transferred to the Delaware District in accordance with the forum selection clauses in VGW’s user contracts.
Also distinguishing the case from others is that a payment company, Worldpay, was included as a defendant.
Among other cases, VGW is defending two brought under the federal RICO Act in New York and New Jersey.
Gaming attorney Daniel Wallach, who has campaigned extensively against sweepstake casinos, argued it is unlikely the civil cases will significantly affect the legal landscape.
He said: “The private civil cases, which now number close to 20, serve as a warning sign of the legal difficulties that the sweepstakes casino sector will be facing from state governmental actors.
“No class action lawsuit will be transformative or bring industry-wide change because they will either get dismissed on a procedural motion or take years before ever reaching trial, only to ultimately be settled.
“There is zero chance that these companies would risk the possibility of an adverse judgment at trial. The name of the game is delay, delay, delay — and if all else fails, write a cheque.”
While he said the sheer number of civil cases was interesting, real impacts would only come from state or federal government action.
Wallach added: “The focus going forward, for those looking for real impact, will be on state legislative bodies, state gaming agencies, and, most importantly, state Attorneys General, who have yet to step in.”
Legislators move to file sweepstake casino bans
The case comes amid a wider movement to ban sweepstakes casinos in the US, with their opponents accusing them of being illegal gambling.
Multiple states, including New Jersey, New York, Maryland and Connecticut, have seen bills filed that would outlaw the activity.
In response to the Connecticut bill, filed by the state legislature’s General Law Committee, sweepstakes trade association the Social and Promotional Gaming Association (SPGA) issued a press release defending the nascent sector.
An SPGA spokesperson said: “The Connecticut bill is yet another unfortunate example of anti-competitive special interests bending lawmakers to their will at the expense of innovation, small businesses, and the millions of American adult consumers who enjoy the safe and engaging mobile games social casinos offer.”
NEXT.io has contacted VGW for comment.