Class action lawsuits against online sweepstakes gaming operators are accumulating in Alabama.
Key takeaways
- Plaintiffs filed several class action lawsuits over the last two months in Alabama against major sweepstakes operators like Blazesoft, High 5 Games, and ARB Interactive.
- Alabama has strict gaming laws with no legal commercial gambling allowed.
- A tribal gaming lawyer said sweepstakes companies used arbitration clauses to avoid setting legal precedents in some states.
Several major social casino companies, which use a controversial dual currency on their sites, have had opponents file complaints against them during the last two months in a state with strict gambling laws.
Alabama resident Tamara Hester recently took legal action in a Franklin County court against Blazesoft Limited, which operates Sportzino, Zula, and Fortune Coins, and A1 Development, which owns Funrize Casino and NoLimiteCoins, and several other sweepstakes brands.
Alabama is quickly becoming a forum of choice for sweepstakes casino litigation. Two more class actions were filed today in Franklin County against Blazesoft (which operates Zula and Sportzino) and A1 Development LLC (the operator of NoLimitCoins and several other sweeps sites). pic.twitter.com/glhxc2Nmsi
— Daniel Wallach (@WALLACHLEGAL) June 27, 2025
These latest lawsuits were filed a week after Alabama plaintiff Hunter Black Jackson entered a class action suit against ARB Interactive, which owns the popular social gaming site Modo Casino. Michael Sumerel took legal action earlier this month against High 5 Games, another popular online social casino company that’s faced lawsuits in multiple states.
Last month, an Alabama mother, Laura Hall, filed suit in May alleging sweepstakes gaming company Stake.us was operating an illegal gambling operation. Hall said in the filing that she and her child were harmed after she lost wages playing casino games on the site. The filing also argued the precedent internet cafes set, long since outlawed, is comparable to online sweepstakes casinos.
Arguing in Alabama
In the three latest lawsuits filed in Alabama, plantiffs argue sweepstakes companies “have leveraged the power of modern smartphones, tablets and computers to smuggle illegal slot machines and other gambling games into homes and workplaces of Americans, where gamblers can satisfy addiction 24 hours a day, 365 days a week without having to leave their homes or places of work.”
NEW: A class action lawsuit has been filed against the Arizona-based operator of sweepstakes casino website Modo Casino for operating illegal gambling games in violation of Alabama's (very) strict anti-gambling laws. This is the 4th loss-recovery lawsuit filed vs. ARB Gaming. pic.twitter.com/o9guimY3aR
— Daniel Wallach (@WALLACHLEGAL) June 20, 2025
In Sumerel’s lawsuit against High 5 Games, the lawsuit stated “companies in the social casino and sweeps casino industry, including Defendant, have extracted tens of millions of dollars from Alabama’s economy in the last five years, all without employing a single person in the state or paying a dime in taxes to Alabama’s treasury. The money extracted from Alabama’s economy ends up not only in Defendant’s home state of Delaware, but also in places like Hong Kong, Israel, Gibraltar, Australia, and Cyprus, where other major players in the industry are headquartered. High 5 is estimated to have an annual revenue of fifteen million dollars per year."
The suit added, “Even if Alabama consumers represent but a small percentage of that total, the reality is that a great deal of money is being removed from the state’s economy each year. Again, this money leaves the state without creating any Alabama jobs or generating any tax revenue for the treasury.”
Sweepstakes scrutiny
Sweepstakes gaming operators came under fire over the last couple of years for offering free-to-play casino-like slot and table games, but also have coins players can purchase and then exchange for cash and prizes.
Residents in California, New York, Illinois, and other states joined those in Alabama in filing lawsuits against social casinos and sportsbooks.
Alabama currently has no legal commercial gaming. It’s one of the few jurisdictions without a state-run lottery. There’s no legal sports betting or online casinos allowed. Only in-person casinos operate legally in the Yellowhammer State. Multiple legislative efforts to bring more gaming to Alabama failed in recent years.
Legislatures in New York, Montana, Connecticut, and Nevada passed anti-sweepstakes bills in recent weeks. California, with no online legal gaming, introduced tribal-backed legislation last week that would make sweepstakes casinos and sportsbooks illegal in the massive Golden State market.
Avoiding precedent
Alabama’s lack of legal gambling could work in the plaintiffs’ favor with these lawsuits. There are fewer loopholes and stricter penalties for operating illegally compared to some states.
However, Michael Hoenig, tribal gaming attorney and vice president and associate counsel for the Yuhaaviatam of San Manuel Nation in California, said during a recent episode of the webcast New Normal that sweepstakes gaming companies have avoided setting precedents in many states.
“The problem with the litigation that’s brought by users sometimes is these companies often have arbitration clauses in their terms and conditions, so when you sign up for an account, you basically agree that if you have a problem gambling…if you have a claim you can’t bring into court then you have to go through arbitration,” Hoenig said. “If they sue, the court may say, ‘Sorry, you have to go through arbitration, and it may be that they either settle for a big enough amount for the case to go away so that we don’t get precedent in state courts that this is indeed a gaming company.”
