Florida Attorney General James Uthmeier has taken legal action against sweepstakes casinos, calling them a gateway to real money gambling. He filed lawsuits against operators VGW and Stake on August 19.
These legal actions seek to close down operations in Florida, recover allegedly obtained gambling proceeds, and provide restitution and penalties for consumers.
The lawsuits also target payment processors accused of facilitating sweepstakes transactions, including Breeze Labs, Praxis, Trustly, and Worldpay.
Uthmeier accuses the defendants of running illegal online casinos in Florida, emphasizing the harm done to Florida citizens and the state’s loss of tax revenue due to unregulated gambling entities.
Stake is criticized for using the concept of safe social gaming to attract consumers before leading them to illegal gambling activities behind closed doors.
Uthmeier alleges personal involvement of Stake co-founders Ed Craven and Bijan Tehrani in the company’s marketing and expansion strategies.
The attorney general argues that sweepstakes companies mislead consumers by claiming to be legal and free, while engaging in practices that exploit Floridians and violate the state’s laws.
Understanding Sweepstakes
Sweepstakes casinos use a system of virtual currencies to navigate gambling regulations. Players purchase Gold Coins with no cash value and receive additional Sweeps Coins as a bonus.
Operators argue that since Sweeps Coins are given away rather than sold, and can be obtained without a purchase, players are participating in a promotional sweepstakes, not gambling.
Uthmeier disputes this distinction, asserting that consumers are essentially purchasing casino chips under a different name.
Legal Challenges Nationwide
Several states, including California, Connecticut, Indiana, and others, have implemented laws targeting sweepstakes casinos. Michigan and Washington have used existing laws to remove operators from their markets.
Earlier this year, Florida lawmakers considered legislation to strengthen the state’s ban on internet gambling.
Although House Bill 591 by Rep. Berny Jacques did not pass, Uthmeier argues that existing laws in Florida already prohibit the sweepstakes casino model.
He asserts that these actions harm vulnerable individuals in Florida and lead to significant financial losses for consumers, while defendants profit illicitly.