Utah has rapidly become the epicenter of a nationwide legal offensive against sweepstakes casino operators. More than 100 class action lawsuits have now been filed nationwide, 15 of which were in Utah within the last week alone.
Key Takeaways
- Utah has emerged as a focal point for sweepstakes casino class actions, with more than 15 suits filed in the past week.
- Plaintiffs are attracted to Utah's strong anti-gambling laws and double-damage provisions, which allow for the recovery of twice the economic loss.
- The surge in litigation highlights growing scrutiny of dual-currency sweepstakes models nationwide.
On Sunday, gaming analyst and attorney Daniel Wallach highlighted that 12 new lawsuits were submitted in Utah federal court targeting nearly every major sweepstakes casino platform, including ARB Gaming (Modo.us), Stake.us, VGW, Blazesoft, KHK Games, Sunflower Ltd., B2Services (McLuck), A1 Development, FSG Digital, Yellow Social Interactive, and Money Factory.
Utah's strict anti-gambling framework is the driving force behind the wave of filings. The state's law allows anyone who loses money through illegal gambling to seek twice the amount lost plus attorney fees.
Additionally, state law says that gambling is any activity in which something of value is at stake in a game or contest decided by chance. Since all forms of gambling are illegal in Utah, including charitable lotteries and raffles, plaintiffs' lawyers have been focusing more and more on the state as a good place to file lawsuits.
The fact that so many cases are happening in Utah means that the legal risk is growing, which could speed up the decline of the sweepstakes casino market as operators deal with the possibility of double damages, defense costs, and changing compliance strategies.
Google bans sweepstakes casino ads
Against this accelerating litigation backdrop, Google has tightened its advertising standards by prohibiting sweepstakes casino ads across all its platforms, closing a longstanding loophole in online gaming promotion.
The new rule, which went into effect on Oct. 28, changes the rules for social gaming so that sweepstakes casinos are no longer considered "social casino games,” meaning they can't be certified by Google Ads.
Before, social casino games, which are like gambling games but don't give out real money, could advertise with disclaimers that made it clear that playing them didn't cost anything. However, sweepstakes casinos operate on a dual-currency model that allows users to purchase "gold coins" and receive bonus "sweeps coins" redeemable for cash prizes, which Google now classifies as real-world rewards.
The change puts these operators under Google's stricter Online Gambling advertising policy, which means they can't pay to advertise anymore. The decision comes amid mounting legal and regulatory scrutiny.
Several U.S. states have banned sweepstakes casinos, and attorneys general and gaming commissions have called the model "unlicensed online gambling." Critics contend the systems disguise cash wagering as social gaming, while operators insist redemptions do not equate to withdrawals.
Google's policy shift marks another setback for the rapidly shrinking sweepstakes casino industry, which is already facing mounting lawsuits and enforcement actions.
