A Georgia resident has launched a class action lawsuit against Virtual Gaming Worlds (VGW) and its subsidiary companies, claiming they are operating illegal online gambling websites within the state. The lawsuit, initiated by Destiny Kennedy, targets VGW Holdings Limited and its subsidiaries, VGW Malta Limited, VGW Luckyland Inc., and VGW GP Limited, for allegedly violating Georgia’s gambling laws by running internet gambling platforms such as Chumba Casino, Global Poker, and LuckyLand Slots.

VGW Falsely Marketing Online Gaming Platforms as ‘Just for Fun’

Kennedy’s complaint, filed in the Georgia Northern District Court on May 17, 2024, asserts that VGW’s activities breach the Georgia Code stipulations. She argues that the company falsely markets its platforms as “just for fun gameplay,” misleading users into believing that the sites are legal and purely for entertainment, according to information published by Top Class Actions. 

However, Kennedy claims that the real purpose of these sites is to facilitate illegal gambling, as users wager and lose real money through a dual-currency system involving Sweeps Coins and Gold Coins.

Kennedy’s legal action seeks to represent a broader class of Georgia residents who have lost money on VGW’s platforms. Kennedy reports a personal loss of approximately $1,150 from playing games on the implicated websites. The lawsuit demands monetary compensation for these losses and requests a jury trial to address the grievances of all affected consumers in Georgia.

VGW’s model, which includes both free-to-play currency and a purchasable Sweeps Coins system that can be redeemed for cash, is at the core of the allegations. Kennedy argues that while the sites allow for gameplay without real money, the primary goal is to encourage users to buy Sweeps Coins, thus disguising the gambling aspect under a veneer of legality. 

Kennedy Opted Out of VGW’s Arbitration Agreement

The case also highlights Kennedy’s proactive stance in opting out of VGW’s arbitration agreement, which typically redirects disputes to private arbitration rather than court trials. This move distinguishes her case from similar lawsuits that have been compelled to arbitration due to the terms agreed upon by users.

VGW has a history of legal challenges in the United States, having previously settled a lawsuit in Kentucky for over $11 million concerning its LuckyLand brand. The outcome of the current lawsuit in Georgia could have significant implications for VGW’s operations in states where online gambling remains heavily regulated or prohibited.

Last year, VGW also had to withdraw from the Michigan market, discontinuing its social gaming brands Chumba Casino, Global Poker, and Luckyland Slots, after facing regulatory pressure. 

As the Georgia case proceeds, VGW has yet to respond to the allegations. 

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Svenska Spel Sport & Casino, Sweden’s state-owned gaming operator, has renamed its horse games to Svenska Spel Hästar following a dispute with ATG over the name of its trotting venture. The Patent and Market Appeal Court announced the judgment on 25 January, prompting the company to implement this change. This incident marks another setback for the operator, but it remains well-positioned for further growth.

The Name Change Should Have No Ill Consequences

The transition to Svenska Spel Hästar aims to maintain service continuity while complying with the court’s judgment regarding the name dispute. Svenska Spel remains committed to delivering a top-notch trotting experience for its users, incorporating emerging technologies to ensure lasting customer engagement while remaining true to its safe gambling commitment. 

Svenska Spel Sport & Casino CEO and business area manager Fredrik Wastenson did not hide his disappointment with the court’s ruling, expressing confusion at how the judges considered that descriptive words for a business could have such high protection. He nevertheless acknowledged the decision and vowed to make the transition as smooth as possible.

“We are proud of our fantastic offer on horses, which will be available just like before, but now under Svenska Spel Hästar.”

Fredrik Wastenson, Svenska Spel Sport & Casino CEO and business area manager

Svenska Spel Hästar provides various betting options, including bets on high-stakes games like High Five, Duo, and other formats like Winner and Place in French competitions. The platform also allows users to follow all races live. An upcoming highlight of the French trotting season, the Prix d’Amérique, is scheduled for 28 January at Vincennes.

Sweden’s Land-Based Sector Continues to Struggle

While the rebranding of Svenska Spel’s horse games is a relatively minor issue for the operator, it may compound with several other recent setbacks. The company recently announced it could close two land-based venues, Casino Cosmopol in Gothenburg and Malmö.  Svenska Spel confirmed it intends to close the two venues while seeking to “limit losses.”

These challenges originate from the decreasing share of the land-based sector within the gaming vertical in the country. The state-owned operator explained that a substantial shift toward the online gambling sector occurred in 2019 with the reregulation of the industry, further exacerbated by the pandemic. However, Svenska Spel has implemented measures to increase revenues, hopefully achieving a more balanced market.

Svenska Spel’s state-owned status means the operator is significantly more resilient to market downturns and can more easily implement measures to tackle rising industry challenges. It also plays a vital role in spearheading gambling harm prevention research and ensuring that the country’s gambling sector remains safe and sustainable.

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A class action lawsuit has been filed against Evolution by consumer and class action specialists Federman & Sherwood. The suit alleges Evolution deceived investors regarding its growth trajectory and compliance with US law, undermining its revenue and growth. The lawsuit covers the period between 14 February 2019 and 26 October 2023, seeking to recover damages on behalf of investors who purchased Evolution securities.

The Company Faced Rising Pressures

Evolution has faced regulatory challenges, including allegations of breaching US sanctions and operating in countries black-listed by the US. In November 2021, the company was accused of conducting business illegally in several markets, resulting in a substantial decline in its share price. A January 2022 analyst report suggested that a significant portion of Evolution’s revenue could be at risk due to potential regulatory clampdowns.

In April 2022, Australia’s gambling regulator requested ISPs to block unlicensed online gambling sites, five of which were Evolution customers, leading to a decline in the company’s share price. The Swedish Administrative Court upheld a record fine on an Evolution customer, ComeOne Group, resulting in an 11% drop in shares. Reports of industry entities lobbying against the UK’s planned gambling laws overhaul also impacted Evolution’s shares.

Evolution’s financial reports revealed several underlying challenges, showcasing stagnant North American performance and flatlined overall growth, leading to share price declines. October 2023 marked the latest negative development for Evolution as it experienced delays in opening new studios, raising concerns regarding the company’s long-term prospects.

The Plaintiff Alleges Evolution Obscured Information

The Federman & Sherwood complaint alleges violations of Section 10(b) of the Securities Exchange Act and Rules and breaches of Section 20(a) of the Securities Exchange Act. The lawsuit claims that between 24 January 2022 and 26 October 2023, various disclosures revealed the truth about Evolution’s compliance, revenue, and growth, leading to a significant share price drop.

“The Complaint alleges that Defendants… made materially false and/or misleading statements regarding Evolution’s compliance with governing laws…and growth strategies.”

Federman & Sherwood statement

The suit names Martin Carlesund, Evolution CEO, and Jacob Kaplan, chief financial officer defendants. If the company did obfuscate its growing regulatory and compliance issues, it could have significant long-term repercussions. Evolution has not yet responded to the allegations, likely preferring to save its efforts for the impending hearing.

Federman & Sherwood set a deadline of 26 March 2024 for investors wishing to participate in the legal action against Evolution. The class action lawsuit sheds light on Evolution’s challenges in maintaining regulatory compliance. The subsequent impact on its financial performance and shareholder value could draw increased scrutiny on the sector as a whole.

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Spelinspektionen, the Swedish Gaming Authority (SGA), has taken action against two companies providing games in the country without proper licensing. Such actions represent a severe violation of Sweden’s gambling regulation and led to immediate action. The authority was adamant that the two operators threatened the safety of Swedish players, reaffirming its commitment to a sustainable and people-focused market.

The Offending Websites Operated without Permission

Upon investigating the website under the CSGOBIG (csgobig.com) brand, the SGA revealed that the platform was conducting gambling activities. The company and its affiliates had marketing content in Swedish. Furthermore, the investigation determined that the website lacked adequate measures to prevent Swedish consumers from registering and creating accounts.

The offending website is owned and operated by True Polygon Entertainment Limited, registered in Cyprus. No information was available regarding the current licensing status of True Polygon Entertainment Limited in any jurisdiction. While the company was allowed to comment, the Swedish Gambling Authority has not yet received a reply.

The SGA similarly identified Curaçao-based Smein Hosting NV as the company behind gamdom.eu and gamdom.com. The SGA found that Smein Hosting was providing its services in Sweden, actively marketing to Swedish customers through affiliate partners. Gamdom was one of the operators included in Twitch’s black-list in August, as the streaming platform took a stance against unlicensed operators.

Black Market Operators Remain a Persistent Threat

The SGA emphasized that the Gambling Act applies to games available in Sweden, with specific exceptions. The legislation is rooted in the principle that anyone operating in the Swedish gaming market must have a license and prohibits providing games without the required permission. The SGA noted that the two companies’ disregard for regulations necessitated a swift response.

The Swedish Gaming Authority considers that consumer protection and guaranteeing game safety necessitate immediate compliance with the decision.

SGA statement

The Swedish gambling sector has historically faced significant challenges with black market operators. Although the country can take limited measures to stop such services on its territory, the offending companies often find workarounds to these restrictions. A planned gambling tax raise caused significant industry concerns as regulated operators warned that such measures could make them even less competitive with unregulated entities.

Sweden’s government has repeatedly reiterated its focus on fostering a safe and sustainable market. Despite the SGA’s ongoing efforts, the country faces several worrying trends, as a recent survey revealed that players were unaware of the differences between regulated and black market operators, undermining the regulator’s efforts. Rising problem gambling rates mean that Sweden faces an urgent need to reevaluate its regulatory approach.

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Rivers Casino Des Plaines, located in Illinois, is confronting a proposed class-action lawsuit stemming from a cyberattack in August that exposed the personal information of thousands of individuals. 

Rivers Casino Lawsuit Highlights Security Gaps and Potential Identity Theft Dangers

Lead plaintiff Michael Glebiv, among over 100 individuals already included in the class action, claims that he would not have entrusted his personal information to Rivers Casino had he been aware of the inadequate data security measures in place.

The cyberattack, occurring around August 12 but only discovered in early November, targeted Rivers Casino Des Plaines’ IT network. The compromised information includes employee and patron names, along with sensitive data such as addresses, dates of birth, Social Security and passport numbers. 

While the casino asserts that the cyberattack did not disrupt its operations, a cybersecurity firm investigating the breach emphasizes the potential risks of identity theft due to the stolen personal information.

The class-action lawsuit comprises five counts, encompassing negligence, negligence per se, breach of implied contract, unjust enrichment, and violation of the Illinois Consumer Fraud Act. 

The lawsuit contends that the casino was aware of the value of the unprotected personally identifiable information it held, making it a prime target for cybercriminals seeking unauthorized access to monetize the stolen data.

Rivers Casino Assists Plaintiffs and Offers Identity Protection

Rush Street Gaming, the Chicago-based parent company of Rivers Casino, has not yet issued a legal response to the allegations. However, the company maintains that it employs robust security protocols and promptly took steps to contain and secure its systems upon detecting the cyberattack. 

Despite the casino’s assurances that there is no indication of financial fraud or identity theft linked to the incident, complimentary identity monitoring and protection services are being offered to potentially impacted individuals.

As the lawsuit unfolds, Rivers Casino Des Plaines is actively assisting the affected plaintiffs in the class action, providing services such as placing Fraud Alerts and Security Freezes on credit files, as well as offering dedicated and confidential support through a toll-free response line.

This legal action follows Rivers Casino’s belated revelation of the data breach in November, nearly three months after the cyberattack occurred. Unlike similar incidents affecting MGM Resorts and Caesars Entertainment, Rivers Casino did not receive an immediate ransom demand. 

Customers of Caesars Entertainment and MGM Resorts International have also filed five class-action lawsuits in Nevada District Court, alleging that the casino giants failed to protect important customer data during the cyberattacks. 

The plaintiffs claim that the companies were aware of the significance of consumer data but did not adhere to Federal Trade Commission guidelines, potentially exposing affected customers to a heightened risk of identity theft. The lawsuits seek compensation for the perceived lack of diligence.

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Roblox, the rapidly expanding virtual gaming platform, is facing a class-action lawsuit in the Northern California District Court over allegations that it facilitates child gambling. The lawsuit contends that the company has failed to implement adequate measures to prevent children from accessing external gambling sites through its application.

Legal Action Unveils Unauthorized Youth Access to Gambling on Roblox Platform

Roblox, known for creating a virtual universe, has become one of the leading gaming platforms globally. The legal action asserts that some youngsters gained unauthorized access to funds on gambling platforms while using the Roblox application. 

Despite the platform’s community standards explicitly prohibiting gambling activities, the lawsuit claims that Roblox permits third-party gambling websites to operate through its interface, allowing users to place bets using Robux, as reported by KTVU.

Natalia Garcia from Common Sense Media, a nonprofit organization that provides information and education about various media, has expressed concerns, mentioning that it is not a new problem, unfortunately. She remarked that over the years, there have been numerous concerns regarding the over-commercialization of platforms like Roblox.

The alleged process involves users purchasing Robux, the in-game currency, before venturing into external virtual casinos. Connecting their Robux wallet to the gambling site enables users to convert their Robux credits into the site’s currency. Attorneys argue that, when users incur losses, Roblox imposes a 30% fee on the gambling site for converting credits into cash.

Psychiatrist and Advocacy Group Urge Roblox to Take Responsibility for User Safety

Legal representatives argue that Roblox, given its meticulous tracking of every Robux exchange on its platform, should be aware of users engaging in gambling activities. 

Medical experts have also raised concerns about the safety implications of metaverses like Roblox, emphasizing their addictive nature and potential harm.

Dr. Anna Lembke, a Professor of Psychiatry at Stanford, highlights the addictive nature of digital devices and the potential harm of gambling, especially for developing brains. Lembke emphasizes the responsibility of corporations to establish boundaries and safeguards, contending that strict parental supervision alone is not sufficient.

Common Sense Media recommends restricting Roblox access to children over the age of 13 and urges parents to exercise close supervision. 

Dr. Lembke has voiced support for this position, asserting that she does not believe it is fair to place the entire responsibility on parents. She believes that the corporations responsible for creating virtual spaces for children should establish boundaries and guardrails.

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During a public meeting in July,  The Pennsylvania Gaming Control Board (PGCB) has taken stern measures against individuals who left children unattended while they engaged in gambling activities at casinos. In a recent announcement, the board revealed that seven people have been banned from all Pennsylvania casinos due to their alleged negligence, leaving a total of nine children unattended.

Disturbing Cases of Child Neglect at Pennsylvania Casinos Lead to Bans and Criminal Charges

Shockingly, some children were left in vehicles in casino parking garages, while others were left unattended in hotel rooms. One particularly alarming case saw a male patron leave a 9-year-old child unattended in a hotel room at Mt. Airy Casino Resort for a staggering total of 7 hours and 48 minutes over a 2 ½ day period in order to gamble.

This pattern of neglectful behavior prompted the PGCB to place these individuals on the Involuntary Exclusion List, effectively banning them from all casinos in the state. The board emphasized the importance of not leaving minors unattended in such environments as it creates a potentially unsafe and dangerous situation for the children. It is also important to note that leaving minors unattended at a Pennsylvania casino can lead to criminal charges for the responsible adult, adding more gravity to the issue.

The recent incidents highlighted by the board are not isolated cases. Since the beginning of 2022 until June 2023, the board has identified a staggering 397 incidents involving adults leaving children unattended at Pennsylvania casinos, affecting a total of 633 minors. One such example was a couple that left their children in a hotel room while they were in the adjoining casino gambling. Four more people were banned in January for similar reasons. The authorities are actively working to reduce such occurrences and raise awareness of the risks involved.

Pennsylvania Casinos Face Hefty Fines for Allowing Minors on Gaming Floors

Alongside the bans, the board also imposed $67,500 in fines as part of consent agreements with several operators. Downs Racing, L.P., operator of Mohegan Pennsylvania, faced a hefty $50,000 fine for allowing individuals under the age of 21 to access the gaming floor multiple times for gambling and alcohol consumption. Rivers Casino Pittsburgh operator Holdings Acquisition, L.P., was fined $10,000 for allowing an underage individual access to the gaming floor and Rivers Casino Philadelphia operator Sugarhouse HSP Gaming, L.P., received a $7,500 fine for employing an untrained roulette dealer.

Last year the PGCB launched the “Don’t Gamble with Kids” campaign ahead of Thanksgiving, warning casino patrons not to bring their children and leave them unattended while visiting casinos. The campaign aimed to raise awareness and address the alarming number of cases where adults left their children unsupervised in casino hotel rooms or parked cars, leading to potential lifetime bans from casinos and possible criminal charges.

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The UK’s Department for Culture, Media and Sport (DCMS) has released an update on industry-led measures to enhance player protections in relation to loot boxes in video games. Following the recommendations from DCMS, the industry trade body UK Interactive Entertainment (Ukie) has developed and published 11 principles on loot boxes. 

UK Government Calls for Improved Safeguards as Concerns Grow Over Loot Boxes in Video Games

While loot boxes are not explicitly classified as gambling products, concerns have been raised about the potential risk of harm they pose, particularly to young people. 

The new industry guidance focuses on several key principles. It emphasizes the importance of technological controls to restrict the acquisition of loot boxes by individuals under the age of 18 without parental consent. The guidance also calls for improved age assurance technologies and a commitment to refund policies to mitigate financial harms associated with loot boxes. Furthermore, it emphasizes the need for clear probability disclosures to inform players about the likelihood of receiving specific items or categories of items in loot boxes.

The guidance also highlights the significance of supporting the Video Games Research Framework, which facilitates data-driven research on video games. Additionally, the guidance addresses the unauthorized external sale of items acquired from loot boxes for real money, advocating for IP protection measures to combat such sales.

Other counties such as Australia and the Netherlands have also cracked down on the use of loot boxes in video games.

£1M Campaign to Educate Parents on Game Guidelines Featuring Judi Love

To raise awareness and educate players and parents about these guidelines, a £1 million ($1.3 million) public information campaign will be launched, featuring broadcaster Judi Love. This campaign aims to guide parents on the use of parental controls to manage in-game purchases, screen time, online interactions, and access to age-appropriate content.

The DCMS expects the games industry, coordinated by Ukie, to fully implement the guidance and report back on its implementation progress. The government will monitor the effectiveness of the guidance over a 12-month period and assess its impact on player protection. 

While some stakeholders may advocate for legislative intervention, the government believes that an industry-led approach is currently more suitable, given the dynamic nature of loot boxes and in-game purchases. 

At the same time, new research has indicated a link between spending on loot boxes in video games and symptoms of problem gambling. The study focused on 400 regular gamers aged 18-24 and found that higher spending on loot boxes correlated with a higher likelihood of engaging in gambling behavior. Other research has also suggested a similar link between gambling addiction and loot boxes.

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Betfair International Plc, a subsidiary of Flutter Entertainment, has been hit with three enforcement orders and a reprimand by the Danish Gambling Authority, Spillemyndigheden, for breaching Denmark’s Anti-Money Laundering (AML) Act.

Betfair Faces Regulatory Action for AML Act Violations in Three Key Areas

The regulatory authority found that Betfair had failed to meet the requirements set out in the AML Act in three key areas. The first order was issued because Betfair’s risk assessment did not adequately consider the inherent risk factors associated with its business model.

The second order was issued due to insufficient written procedures for customer due diligence. The procedures did not ensure that customer due diligence measures were conducted at appropriate times in accordance with the requirements outlined in the AML Act. 

Furthermore, the written procedures did not address how Betfair would become aware if an employee was convicted of a criminal offense during their employment, thereby increasing the risk of money laundering and terrorist financing.

The third order was given because Betfair failed to provide documented evidence of regular and appropriate controls in various areas such as risk management, customer due diligence, employee screening, investigation and reporting obligations, information storage, and internal controls.

The company must now submit an updated risk assessment that addresses the identified shortcomings, improve its written procedures, and provide documentation of future control procedures.

Betfair has been given a three-month deadline to rectify the issues highlighted in the first two orders, while a twelve-month deadline has been set for the submission of documentation demonstrating compliance with the third one.

Spillemyndigheden Issues Reprimand to Betfair over Customer Identity Control Deficiencies

Additionally, Betfair received a reprimand from Spillemyndigheden for its inadequate control of customer identity information up until May 16, 2023. However, this specific violation is no longer active and does not require further action.

The Danish Financial Supervisory Authority (DFSA) introduced updated rules for the AML Act earlier this year, imposing stricter requirements for customer due diligence and monitoring individual transactions and money transfers.

Betfair now faces the challenge of addressing the deficiencies highlighted by the Danish Gambling Authority within the specified timeframes, in order to ensure compliance with the AML Act and maintain its operations in Denmark.

Betfair has also faced difficulties in Sweden and the UK. In April, the company was fined for providing betting markets on 148 matches between 2021 and 2022 in the U21 Allsvenskan, a youth soccer league where operators are prohibited from offering gambling opportunities. In May, Betfair faced a fine of £490,000 ($606,300) from the UK regulator for the dissemination of promotional material to individuals who had self-excluded themselves.

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The operator of sports prediction games for entertainment, Fliff, is facing a class action lawsuit in California after a complaint seeking $5 million in damages was filed with the US District Court for the Central District of California on June 6.

Seeking Compensation for the Losses

The plaintiff, Bishoy Neshim, claims he lost over $7,000 while using the Fliff app and filed a complaint alleging Fliff is operating as a sportsbook. Neshim seeks compensation for his losses and for the losses of those similarly affected by Fliff’s alleged illegal sports betting operation. The lawsuit also seeks an injunction to stop Fliff from violating the federal Wire Act by offering its contests across state lines.

Sportsbooks are not permitted in California after voters decided against the legalization of sports wagering in November 2022, defeating the proposition that would have allowed for retail sports betting at tribal casinos and horse racing tracks, as well as the proposition that would have opened the state to mobile and online wagering.

The lawsuit states that “Fliff facilitates the ability for California residents to make online sports wagers to win real money without any approvals, regulations, oversight, or taxing,” claiming “to be a free-to-play operator of sweepstakes with the chance to play ‘sports prediction games’ for entertainment” while “in the real world, alleged sports prediction games are nothing more than online sports gambling.”

The lawsuit further elaborates on the model utilized by Fliff through which the operator uses a medium, “Fliff cash,” to replace real money but in practice, Fliff cash “has a dollar-for-dollar equivalence to actual money and that can be withdrawn and wired directly to the users’ bank account.”

The plaintiff states that Fliff does not satisfy the state’s definition of “sweepstakes” as its prizes are not distributed either by lot or by chance, and instead uses the sweepstakes model to entice customers with free “Fliff Coins” and then bait them into depositing US dollars and converting them into Fliff cash.

Regulatory Probe in Ohio

Based in Pennsylvania and with a development hub in Bulgaria, the operator that is currently available in 45 US states was one of five operators which fell under regulatory scrutiny in Ohio, following an investigation launched by the Ohio Casino Control Commission (OCCC) in May.

The OCCC addressed issues that these sweepstakes operators offer markets that mimic traditional prop-type bets, while player wins and losses are dependent on their point totals resembling a spread.

Following the complaint in California, the court is expected to hear arguments from both the plaintiff and defendant in the coming weeks and months. If the court finds Fliff guilty of unlawful bookmaking and wagering under Californian law, the operator will face a felony charge.

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