VGW faces more legal pressurre in Connecticut after withdrawal

Sweepstakes casino operator VGW has come under heavy pressure in the state of Connecticut where the company has received a cease-and-desist letter from a consumer protection group and decided to fold operations.

VGW faces more pressure in Connecticut

This happened early last month, but the legal woes that VGW, operator of LuckylandSlots and ChumbaCasino, faces have not lessened. Rather, the company is now going to face another complaint filed with the Hartford Superior Court, arguing that the platform operated an illegal form of gambling and made the plaintiff continue to gamble through "onerous redemption restrictions."

The news was reported by both Law360, a website that collects legal filings from across the United States and specifically, Daniel Wallach, The Athletic journalist.

In the complaint, the plaintiff argues that the premise under which the defendant operated was untenable: "VGW MALTA, VGW LUCKYLAND, and VGW GP claim to be video game development business entities and operators of a social casino"

In reality, VGW has created, and operates popular virtual internet gambling casinos that market online gambling casino games," the complaint said, but added that VGW’s audited financials showed that the platform had been pushing to promote itself as a legal platform in the state, and thus "manipulating" the plaintiff into "engaging in illegal gambling and losing money."

Given VGW’s troubles in Connecticut, and the fact that the state has questioned the legality of the platform, asking it to shutter its operations could give this new private case the legal teeth to bite a piece out of the sweepstakes operator.

In the meantime, the American Gaming Association (AGA) has hailed Connecticut’s example and has urged other states to examine the legality of the sweepstake and social casinos and whether they are not breaking the law.

The trade group insists that sweepstakes are illegal, and that until 2023, the trade group did not realize that they were so. Further examination of the sector demonstrated to AGA that social and sweepstake casinos were running a model that can barely be called legal, as they offered what was virtually a "gambling product" but did not have any "skin in the game."

Sweepstakes not cut any slack in the United States

Sweepstakes operators have tried to dispel these allegations during a recent briefing of the Social and Promotional Gaming Association which insisted that the criticism against sweepstakes operators was not tenable and came from a place of "lack of understanding" of what the sweepstakes model is – and what it isn’t.

Not much else is known about the case just yet, but it is likely for VGW to seek and stop it in its tracks. Whatever the outcome, it will most likely pave the way for similar decisions moving forward. The sweepstakes vertical is under assault. VGW is also fighting a similar case in Mississippi and elsewhere.

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