Date: December 19, 2024, 11:06h.
Last update: December 19, 2024, 11:06h.
A recent ruling by a federal judge illustrates the challenges of litigating or prosecuting an online gaming website operating offshore from a different country.
Earlier this week, Judge Thomas Thrash in Georgia’s Northern District ruled that the court lacked jurisdiction over VGW Holdings Limited and its subsidiaries. This came after Georgia citizens who had gambled and lost money at VGW’s online sweepstakes casinos were unable to establish personal jurisdiction over the company.
Although Georgia users could access the defendants’ casino gaming websites and make payments, the court found the interactions insufficient to meet the requirements of the Georgia Code for transacting business,” stated Thrash.
VGW operates various online gaming platforms known as social sweepstakes casinos.
Platforms like LuckyLand Slots and Chumba Casino allow users to play for free initially, with the option to purchase sweeps coins for actual cash winnings after using up their free gaming tokens.
Overview of Jurisdiction
VGW is an Australian-registered online gaming company based in Malta and Delaware. Due to their remote operations outside of Georgia and the U.S., they are shielded from civil litigation by the court.
The exercise of jurisdiction under the long-arm statute would be unfair and contrary to the principles of justice as the defendants could not have foreseen being brought to court in Georgia,” Thrash explained.
“The defendants’ connections with Georgia do not meet the standards for establishing general jurisdiction in the state,” Thrash concluded in dismissing the civil action against VGW.
Impactful Ruling
Daniel Wallach, a prominent U.S. gaming industry lawyer, noted that Thrash’s ruling demonstrates the challenges of using civil litigation to challenge the legality of sweepstakes casinos.
The regulated U.S. gaming industry considers online sweepstakes casinos illegal gambling enterprises, leading to cease-and-desist orders issued to operators like VGW by state regulators and lawmakers.
VGW has ceased operations in several states following warnings, with officials in other states declaring online sweepstakes casinos as illegal forms of gambling.