Florida AG Targets Stake and VGW, Files Lawsuit Against Sweepstakes Casinos

Florida Attorney General James Uthmeier has filed two lawsuits targeting the operators of several major online sweepstakes casinos, including Stake and VGW’s Chumba Casino, LuckyLand, and Global Poker, alleging that these casinos act like “gateway drugs” to real-money gambling. Florida AG Sues Sweepstakes According to the lawsuit, players purchase packages of “Gold Coins” that include redeemable “Sweepstakes Coins,” which can be used to wager on virtual slot machines, blackjack, and poker. Any winnings can then be redeemed for cryptocurrency, gift cards, or cash. Uthmeier alleges that the companies are exploiting vulnerable Floridians, including minors and seniors, while circumventing state licensing requirements and consumer protections. Sweepstakes casinos are seeing not insignificant pushback from many other jurisdictions in the US. For example, New Jersey might be the next state to ban sweepstakes, as the state recently passed Assembly Bill A5447, which aims to prohibit the sweepstakes wagering model. Back to Florida, the lawsuits aren’t the only thing that the state has tried against sweepstakes. Earlier this year, Florida lawmakers considered legislation that would have strengthened the state’s ban on internet gambling with House Bill 591, sponsored by Rep. Berny Jacques. However, it failed to advance out of committee before the legislative session ended in March. AG Says Stake and Other Sweepstakes Break Florida’s Law In the lawsuit, Uthmeier alleges that VGW’s sweepstakes casinos violate Florida law, harm Florida residents, and deprive the state of licensing, tax, and other revenues that would otherwise come from properly regulated gambling operators. Stake, it seems, is the prime target of his criticisms, as Uthmeier alleges that the company uses the appearance of safe “social gaming” and celebrity endorsements to attract consumers before directing them toward what he describes as illegal, unlicensed real-money gambling operations. Stake co-founders Ed Craven and Bijan Tehrani are also named as individual defendants. The Florida AG claims that both men personally participated in and exercised control over the company’s marketing and expansion strategies. What Uthmeier’s lawsuits essentially argue is that no new legislation is needed because the sweepstakes casino model already runs afoul of Florida’s existing gambling laws. He alleges that the operators’ activities put vulnerable Floridians He claims children and seniors are exposed at risk of significant financial losses, while allowing the defendants to generate substantial profits through what he describes as unlawful gambling operations. In other news from Florida, earlier this week, authorities busted several illegal gambling venues, seizing a total of 60 slot machines.