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Sweepstakes casinos have become public enemy number-one in the legal betting world. Particularly, Native American-based casinos have been irked by their somewhat sudden and stunning rise (but so have leading mobile apps).
As of now, most angry parties are just that — angry. They’re complaining but not taking action against these sweepstakes games that pretend they’re not offering real-money betting (more on this soon).
Why no action? Well, most have their eyes on a case in Florida. This lawsuit has possible ramifications for the rest of the country. Keep reading and we’ll tell you what’s going on with Florida’s betting scene.
Sweepstakes Company Wins In Florida (So Far)
At the heart of this Florida lawsuit is one of the biggest players in this space, VGW Holdings. They operate some of the biggest sweepstakes casinos in the market with Chumba Casino and Luckyland Slots. Companies like VGW and others skirt around the rules with their sweepstakes model. Under this system, players don’t technically gamble real money. Instead, they purchase virtual currency (often with free bonus coins included), which can then be used to play casino-style games. However, in many cases, winnings can even be redeemed for real cash, which is where legal gray areas start to form.
Is it legal? Is it not legal? Welp, Knapp are the plaintiffs in this Florida case and they’re saying it’s illegal to operate. They’ve brought forward a class-action lawsuit that says VGW’s games violated state gambling laws. If you remember, the Seminole Tribe and their Hard Rock Casino brand have the exclusive right to offer Florida casino betting.
However, the case didn’t go far. A Florida federal court dismissed the lawsuit, ruling that it had no jurisdiction over VGW since the company is based in Australia and doesn’t maintain a strong enough presence in Florida to be sued there.
Judge Carlos Mendoza’s 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.”
For VGW, this was a huge win, protecting them— at least temporarily — from further legal trouble in the state. The keyword here is temporarily because the case is being escalated to the Delaware District. All this is to say the larger debate over whether sweepstakes casinos should be considered gambling under U.S. laws is far, far from over.
What’s At Stake Here?
What’s at stake? How about billions and billions of dollars? Seriously, the legal gaming industry is worth that and then some. As more and more states open the door to legalized betting markets, the number of money at stake will only grow.
The market size is why so many legalized operators are beginning to fight back. Not only against sweepstakes casinos, but all leading offshore sportsbooks. It seems every month there’s news about a state banning an international sportsbook. Now that states are collecting taxes off legalized betting, they want to maximize their profits.
But here’s the thing, in the stake or sweepstakes casinos, the competition isn’t necessarily trying to get them banned like they are offshore sportsbooks. No, the just want these casinos to play by the rules. This means obtaining expensive licenses and paying higher taxes — just like they have to.
With this much at stake, you know sweepstake casinos aren’t going to sit back and allow themselves to be sued to the ground. No, no, no they are in fight mode too. VGW has assembled an expensive legal team to fight this case — and we can imagine others are in the same boat. A competitor like Fliff, who has deeper pockets, is probably rounding up the best team of lawyers that money can find.
Right now, sweepstakes companies are arguing that players can participate without spending money — since free coins are often available. They also highlight the fact that no direct wagers are placed, which separates their games from traditional gambling. But will that be enough? Ultimately, the courts will decide.
Should Online Players Be Concerned?
For now, if you enjoy playing at sweepstakes casinos, there’s no immediate reason to worry. VGW’s recent legal victory means their platforms can continue operating without restrictions in Florida for the time being.
However, players should stay aware that changes could come down the line. If courts decide to redefine sweepstakes gaming as gambling, platforms might have to adjust their models, limit access in certain states, or increase costs to comply with new regulations.
The good news? As long as there’s demand for online gaming, companies will find creative ways to keep offering their services — whether through legal adjustments or new business models that align with changing regulations. Trust us, there’s always a loophole to exploit. Always!
But anyway, we encourage you to keep tabs on the issue here with us. We’ll be monitoring this story closely as it’s one of the biggest issue facing the industry in 2025. We fully expect more lawsuits this year, and perhaps, regulatory changes based on those court outcomes. Only time will tell but we’ll be on top of it all so check here for the latest news!
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