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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A pivotal lawsuit in Germany aimed at reimbursing gambling losses has been referred to the European Court of Justice (ECJ). The Federal Court of Justice of Germany (BGH) was initially scheduled to decide on whether unregulated operators should refund player losses earlier this month. However, this hearing was canceled after the defendant, an Austria-based sports betting operator, withdrew its appeal.

Last week, a regional court decision on player reimbursement lawsuits mandated that all German civil courts, including the BGH, must either suspend proceedings or submit them for review. This action, spearheaded by the German law firm Hambach & Hambach, ensures that online sports betting and casino issues related to EU law will now be heard by the ECJ. The European court will ultimately make the final ruling on these cases.

The BGH has faced criticism for its perceived reluctance to refer cases to the ECJ. During a March ruling on a sports betting case, the BGH neither suspended nor submitted a referral, which some saw as a hesitation to seek an overarching EU law decision. This could have led to ongoing legal confusion without a decisive EU court ruling until regional courts intervened.

Potential Precedent of Reimbursement Rulings

Claus Hambach, partner at Hambach & Hambach, along with senior associate Phillip Beumer, cautioned that a decision to reimburse players could establish a problematic precedent in Germany.

“Mass media reports have already picked up on the above note by the Federal Court of Justice,” stated Hambach & Hambach. “According to representatives of the ‘player claim industry’, this might now result in a deluge of complaints and court cases.”

They warned that such an outcome could be driven by significant advertising and media coverage, indicating that financiers appear ready to continue backing these claims, potentially extending to sports betting losses, not just casino losses.

Hambach & Hambach expressed concern that reimbursing players might inadvertently bolster the black market. “Germany’s massive black market will even grow further. If players are reimbursed for losses with unlicensed operators, this will only incentivise them to bet with unlicensed operators as the case law basically established betting without a risk of loss.”

Challenges with the Black Market in Germany

A 2023 study by the University of Leipzig highlighted the prevalence of offshore operators in Germany’s online gambling market, revealing that nearly half of all online gambling occurs with these unlicensed entities. The channelisation rate in Germany’s online gambling space stands at just 50.7%, with the study estimating that the black market accounts for three-quarters of online revenue. This situation results in the state missing out on hundreds of millions in tax revenue.

In response, both the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) have urged the German gambling regulator (GGL) to make onshore operators more attractive to bettors. By improving the appeal of regulated platforms, these associations hope to draw players away from the black market and ensure that gambling activities contribute to the national economy.

As this lawsuit progresses to the European Court of Justice, its outcome could significantly impact the regulatory landscape for online gambling in Germany and potentially across the European Union. The final decision by the ECJ will be crucial in shaping the future of player reimbursements and the fight against the black market in the gambling industry.

Source: “Germany loss reimbursements lawsuit to be sent to European court”. iGamingBusiness. May 20, 2024.

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Minnesota casino, racetrack, and hotel Running Aces has recently amended its federal lawsuit and added Mystic Lake and Little Six Casinos, owned by the Shakopee Mdewakanton Sioux Community. Running Aces has accused tribal casinos of offering unauthorized video games of chance in violation of federal and state laws. 

Running Aces Alleges Illegal Advantage in Tribal Casinos’ Gaming Activities

Running Aces filed the amended complaint on May 14 expanding the scope of the initial lawsuit against Grand Casino Hinckley, Grand Casino Mille Lacs, and Treasure Island Resort & Casino. According to the legal action, Running Aces alleges that the casinos along with the newly added Mystic Lake and Little Six have an illegal and unfair advantage because they are hosting unauthorized gaming activities, reported the Star Tribune.

Taro Ito, the CEO and President of Running Aces, underlined the gravity of the situation by saying: “For decades, tribal casinos and certain politicians have been falsely perpetuating that they are entitled to an exclusive right on gaming in the State of Minnesota, including electronic video games of chance. To the contrary, under the Indian Gaming Regulatory Act of 1988 (IGRA), which is a federal law, such an exclusive right is in fact prohibited.”

He further added that the current legal regulations in the state of Minnesota specifically prohibit the playing of electronic video games of chance for any person.

Running Aces Seeks Monetary Compensation in Heightened Legal Battle

The legal battle has become even more intense as Running Aces is not only looking for a court injunction but has also filed for unspecified monetary damages that the company is seeking from the executives of the targeted tribal casinos.

According to the filed lawsuit, through their offerings of Class II video slots and other video games, the respondents have violated both state compact agreements and Minnesota criminal law.

The Shakopee Mdewakanton Sioux Community responded to the lawsuit by defending the legality of its gaming operations. The tribal operator denounced Running Aces’ claims as baseless. It also accused the horse racing track of tarnishing the reputation of tribal gaming. 

The Shakopee Mdewakanton Sioux Community confirmed that all gaming offerings at Mystic Lake and Little Six Casinos comply with tribal, federal, and state laws.

This legal clash comes on the backdrop of a broader debate in Minnesota’s legislature over the expansion of gambling, which is focused mainly on sports betting and Historical Horse Racing (HHR). As part of the debate, tracks like Running Aces and Canterbury Park have expressed concerns that they are being sidelined in legislative discussions.

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A class-action lawsuit, which presented price-fixing claims against major Las Vegas hotels, has been dismissed by a federal judge. Thus, Caesars Entertainment, MGM Resorts, Wynn Resorts, and Treasure Island scored a big victory in prolonged legal proceedings, which started over a year ago.

Lawsuit Alleges Price-Fixing Conspiracy Among Major Las Vegas Hotel Operators

The lawsuit was filed back in January 2023 by Seattle-based law firm Hagens Berman Sobol Shapiro on behalf of two tourists who sought repayment for alleged overcharges. The lawsuit accused major Las Vegas hotel operators such as Caesars Entertainment, MGM Resorts, Wynn Resorts, and Treasure Island that they have made surreptitious agreements aiming to inflate room prices with the help of data-sharing software called Rainmaker. 

Allegedly the operators used the software developed by Florida-based Cyndyn Group to share sensitive pricing information among themselves, which then resulted in artificially high room rates.

The plaintiffs challenged the major Las Vegas operators under the Sherman Antitrust Act, which aims to prevent anti-competitive practices that could harm consumers.

In the recent hearing in connection with the case, US District Chief Judge Miranda Du dismissed the lawsuit, reported The Las Vegas Review-Journal. She stated that plaintiffs did not prove that there was in fact a clear price fixing agreement among the hotel operators.

Du’s decision followed another dismissal of the lawsuit that happened in October 2023. The plaintiffs then filed an amended complaint but still, the judge found their allegations insufficient to establish a plausible case of price-fixing.

Lawsuit Claims Bias in Vegas Hotel Pricing Software, Judge’s Ruling Highlights Gray Area

According to the claims in the lawsuit, using Rainmaker’s software affected the normal market competition as it provided biased pricing recommendations, which the plaintiffs claimed were in favor of the hotel operators. As a result, the room prices had higher rates for consumers. 

However, Judge Du pointed out that hotel operators do not have to align their prices with the suggestions from Rainmaker, which weakened the plaintiffs’ argument.

Hotel operators’ representatives hailed the decision but also stressed that they are committed to fair business practices.

At the same time, the legal representatives of the plaintiffs said that they are currently considering their options and may potentially file for an appeal.  

Last year in April, the Las Vegas hotel-casino operators also sought to dismiss the class-action lawsuit, refuting the plaintiff’s claims and dubbing them a conspiracy. 

Back then, Amanda Belarmino, an assistant professor at the William F. Harrah College of Hospitality at UNLV, also opposed the allegations as unfounded. She attributed the high room rates to implications following the removal of pandemic restrictions. 

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United Auto Workers (UAW), a union which also represents casino workers, has previously filed a lawsuit that wants to compel the state to remove Atlantic City’s nine casinos from the list of excluded properties where indoor smoking is allowed. The UAW’s lawsuit argues that the health of casino staff is put in danger because of the continuation of indoor smoking on gaming floors.

We Are All on the Same Side – Almost

Yet not everyone agrees. A pushback from the New Jersey Attorney General’s office is to be expected, but the camp against banning smoking for the time being also includes Local 54 of the Unite Here union, the state’s largest, which represents 10,000 casino workers and has filed an appeal with the Superior Court of New Jersey to dismiss the lawsuit brought around by UAW.

The filing says that workers stand to lose their jobs should a smoking ban be enacted, and further notes that only 25% of gaming floors are currently covered by the indoor smoking exemption. However, the lack of proper filtration between the smoking and non-smoking areas means that secondhand smoke does reach other parts of the gaming floor as well.

UAW is fighting on behalf of dealers at several major properties, including Tropicana, Bally’s and Caesars, with dealers usually the most impacted by smokers at their tables. Trinity Health, a not-for-profit health system, has also appealed to the state to heed the calls of the UAW and move forward with a complete ban on indoor smoking on the gaming floor.

New Jersey AG Matthew Platkin has already defended the state’s decision, and Gov. Phil Murphy, arguing that exempting certain areas of the gaming floors from the indoor smoking ban did not infringe on “any purported constitutional right to safety,” and has asked the Supreme Court to dismiss the lawsuit.

UAW lawyer Nancy Erika Smith, who filed the lawsuit on behalf of the union, has said that she was baffled by Local 54’s reaction, and the union’s decision to fight back against a measure that could ultimately only benefit its workers. However, Local 54 has greater concerns on their minds.

The union’s workers fear that banning smoking would lead to a downturn in casino footfall, which will in turn mean job cuts, with as many as a third of all workers running the possibility of losing their jobs.

To Light Up or Not to Light Up – This Is the Question

Donna DeCaprio, Local 54 president, has mostly sided with what has been said by casinos themselves. A complete ban on indoor smoking at casinos would be “catastrophic” and have serious economic ramifications for casinos and their staff. Yet, Atlantic City and New Jersey have other states to compare against.

Pennsylvanian properties that have banned smoking have not registered a downturn in revenue. Similar efforts to limit smoking are also undergoing in Rhode Island, Kansas, and Virginia. Yet, Local 54 believes that the worst possible scenario is the only one. A complete ban on smoking would significantly reduce the sector’s competitiveness resulting in job cuts.

It has already been tried once before, the union reminded, referring to a 2008 ban on smoking, which saw casino revenues drop by 19.8%. However, there is also evidence to support the claim that casino floors may be reinvigorated as more non-smokers come to Atlantic City to play in a smoke-free area. Besides, a lot has changed in the United States when it comes to smoking habits.

A quick historical comparison shows that in 2008, around 20.5% of the population smoked. The rate has declined to less than 11.5% by 2021, with the latest figures likely to show even further decline. The saga is ongoing, with no end in sight just yet.

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After years of unsuccessful attempts to persuade lawmakers to ban smoking in Atlantic City casinos, workers have taken a new approach: filing a lawsuit to challenge a law that exempts casinos from indoor smoking bans. The lawsuit argues that the exemption for casinos violates the principle of equal protection under the law and seeks to have it acknowledged as unconstitutional.

The Legal Action Escalates an Ongoing Issue

The United Auto Workers (UAW), representing workers at Bally’s, Caesars, and Tropicana casinos, joined by a group of casino workers opposed to smoking in gambling halls, filed a lawsuit in state Superior Court challenging New Jersey’s indoor clean air law. This law, enacted 18 years ago, prohibits smoking in most indoor workplaces but makes an exception for casinos.

At a rally outside the courthouse where the lawsuit was filed, UAW president Shawn Fain noted that such drastic action was only necessary because of the industry’s unwillingness to address the concerns of Atlantic City casino workers regarding their work safety as they must regularly contend with the proven dangers of second-hand smoking.

This legislation was supposed to protect everyone from the dangers of second-hand smoke. But somehow, our casino workers have been asked to roll the dice.

Shawn Fain, UAW president

The issue of smoking in casinos has sparked controversy not only in Atlantic City but also in other states where workers have raised concerns about second-hand smoke. Similar campaigns are underway in Rhode Island, Pennsylvania, Kansas, and Virginia. Proponents of the ban argue that banning smoking would not affect revenues but would tremendously improve casino staff’s quality of life.

Casinos Remain Opposed to a Smoking Ban

Recent revenue reports showing a decline in in-person visits to Atlantic City casinos have raised further alarm among workers and union leaders. They argue that a smoking ban is necessary to protect the health of workers and patrons alike and would constitute a vital step towards resolving the challenges facing the resort city.

State Senator John Burzichelli introduced a bill earlier this year that would address some of the concerns of workers and the casino industry. However, the proposed legislation heavily favored casinos, causing workers pushing for a complete ban to reject this proposal, insisting on improved measures to protect their health and safety.

The Casino Association of New Jersey opposes a smoking ban, citing concerns about its impact on competitiveness with neighboring states. However, workers are determined to push for change through legal action. The plight for safer working conditions has resonated across New Jersey, winning public support. While the lawsuit’s chances remain unclear, the UAW will explore every option to protect the casino worker community.

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Last year, Full House Resorts inched closer to turning its American Place casino in Waukegan into reality. Now, the company awaits the Illinois Supreme Court’s final decision.

Previously, the company secured a positive recommendation from the Waukegan Planning and Zoning Commission to the City Council. This doesn’t mean there wasn’t trouble, however, as previously a lawsuit against the City of Waukegan and the Illinois Gaming Board by Forest County Potawatomi Community tried to prevent Full House Resorts from getting a license.

In 2021, the case was dismissed, providing the casino developer with the green light it needed. The company’s triumph, however, was short-lived as last year, the Illinois First District Appellate Court reversed the dismissal, forcing Full House to put its plans on hold once again.

The company is currently involved in a third-party lawsuit and cannot proceed with the beginning of its construction work for as long as the litigation over the license persists. According to attorney Stewart Weiss, the court should reach a decision by the end of 2024.

Full House Resorts Is Optimistic about the Lawsuit’s Result

Full House Resorts’ goal is to create a luxury resort that would attract customers from the Chicago area and bring economic stimulus to Lake County. According to the company and local leaders, the American Place casino would create many new jobs while providing guests with premium experiences.

The final property will boast a 5-star hotel with 20 suites, as well as a casino with some 100 gaming tables and 1,640 slots. Furthermore, American Place Waukegan will have a 1,500-seat entertainment venue. According to officials, the property “is for everybody,” not just for high rollers.

For reference, American Place’s president and CEO, Daniel Lee, expects the permanent property to open in 2027. He firmly believes that the ongoing lawsuit lacks merit and would be eventually dismissed, after which his team would need approximately two years to finalize the casino hotel. Lee is furthermore convinced that his team has the capacity to finance the construction.

Lake County officials and experts are looking forward to the finalization of the venue, arguing that it would be another attraction. Visit Lake County president Maureen Riedy praised the temporary property and expressed his enthusiasm about the permanent one.

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In a significant legal victory for the city, Norfolk has successfully fended off a $100 million lawsuit filed by Cordish Companies, the developer of Waterside District. The lawsuit claimed that Cordish should have had the first right to develop a casino in Norfolk and sought damages over the city’s casino plans with the Pamunkey Indian Tribe.

Norfolk’s Partnership with Pamunkey Tribe Prevails in Casino Lawsuit Appeal

The Court of Appeals of Virginia, in a 12-page ruling issued on February 27, upheld the lower court’s decision to dismiss Cordish’s lawsuit against Norfolk, Norfolk Redevelopment and Housing Authority (NRHA), and city attorney Bernard Pishko, as reported by The Virginian-Pilot. 

Cordish Companies, a Baltimore-based developer that revitalized Waterside in 2013, argued that it should have exclusive rights to develop and operate a casino based on its Waterside development agreement and lease.

Norfolk’s decision to move forward with the Pamunkey Indian Tribe for the HeadWaters Resort and Casino, located less than a mile from Waterside, triggered the legal dispute. Norfolk District Associates, a Cordish-owned LLC, sued in 2021, alleging breach of contract and an active attempt to exclude Waterside from casino site considerations.

The case was initially dismissed by a Richmond Circuit Court judge in 2022, leading Cordish to appeal. In the ruling from February 27, the Court of Appeals affirmed the lower court’s decision, stating that the 2013 lease agreement did not obligate the city and NRHA to use Norfolk District Associates to develop a casino.

Judge AtLee: Casino Deal Unenforceable

Judge Richard Y. AtLee, representing the three-judge panel, explained that they concluded section 10.2.1 of the agreement could not be enforced because it was essentially an agreement to agree, and the agreement did not allow for a casino. This, he said, supported the circuit court’s decision to uphold the demurrers.

Cordish Companies refrained from providing a comment regarding the ruling. In contrast, city attorney Bernard Pishko conveyed satisfaction, expressing that they were pleased with the court’s confirmation that Cordish and John Lynch had filed the lawsuit against the city, city attorney, and NRHA without a basis.

The appeal process included two rounds, with the second round featuring oral arguments in December 2023 after one judge had to recuse themselves due to a conflict of interest.

The judges who participated in the final round of oral arguments and made the ruling were AtLee, Haley, and Dominique A. Callins, with Causey recusing.The legal victory solidifies Norfolk‘s position in moving forward with the HeadWaters Resort and Casino alongside the Pamunkey Indian Tribe.

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Zappia, who is a shareholder, is filing the lawsuit on behalf of multiple other investors, bringing a class-action lawsuit against the company. In his complaint, Zappia speaks about being “misled” by the company, including on specific matters that have established a “conflict of interest” and have been perceived as “material omissions.”

Case to Be Viewed ahead of Shareholder Meeting

The trigger is the forthcoming acquisition of GAN’s B2B and B2C divisions for $107.6 million by Sega Sammy, which was pitched last year and will now be decided on during a shareholder meeting on February 13, 2024.

According to Zappia, one of the issues with the negotiations has been a reduction in the tabled offer, which began at $2.51 per share but was finally settled for $1.97, citing the changing nature of business within GAN, and the fact that WynnBet, a North American sports betting operator, had left certain key markets.

Zappia’s case also requests access to several documents that can flesh out further details about the exact negotiations that led to the announcement of the proposed deal on November 7, 2023. Previous discussions had taken place on September 30, 2022, the lawsuit’s text alleges.

Zappia further raises an issue with both the Financing Special Committee and the Merger Special Committee, without enough clarity provided into both to know how the final prices were negotiated and hence the suggested material omissions. The complaint similarly alleges conflicts of interests of board members with the proposed transactions.

GAN Denies Wrongdoing of Any Sort

GAN for its part has already refuted the claims that its current or former members of the Board of Directors have been complicit with underhand practices that have done damage to the business for personal gain. All proceedings surrounding the suggested merger were conducted in line with due process, a SEC filing for GAN says, which details the case.

The Zappia v. Gan ltd. has been filed with the United States District Court for the Southern District of New York in January, as confirmed by the same SEC filing provided by the company. Other defendants named in the case are Seamus McGill, Michael Smurfit, David Goldberg, Susan Bracey, and Eric Green, as per the same filing.

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A project seeking to reduce the lanes of Atlantic Avenue in Atlantic City, New Jersey, is subject to a lawsuit filed by casino operators along with AtlantiCare. The legal claim was filed last year and recently gained traction with the city’s claims in support of the project labeled as “road diet.” The project proposes to reduce the lanes from four to two along Atlantic Avenue between New Hampshire and Boston Avenues.

Opponents of the road diet claimed that the city needs to secure approval from the Casino Reinvestment Development Authority (CRDA), a non-profit organization that focuses on tourism in Atlantic City. Besides AtlantiCare, plaintiffs include Tropicana, Resorts, Bally’s, Hard Rock and Caesars. Considering that the CRDA oversees tourism in the city, the plaintiffs argued that they need to approve the proposed project as well.

Another major concern of the plaintiffs is that the road diet will result in traffic congestion. This, in turn, may obstruct emergency vehicles down Atlantic Avenue from reaching AtlantiCare’s emergency, putting lives in jeopardy.

Additionally, the lawsuit alleged that a comprehensive study about the impact on traffic of the project wasn’t conducted. Ultimately, the casinos along with AtlantiCare asked the court to enforce an injunction, temporarily stopping the road diet.

The City’s Defense Fights Back

The opposing side, the city, rejected the claims that the project needs the approval of the CRDA, as announced by the Press of Atlantic City. Last week, Richard Trenk, an attorney defending the city in the lawsuit, filed a brief, claiming that the plaintiffs misinterpreted the responsibilities of the CRDA outlining: “Thus, because no statute or regulation requires approval from CRDA, the City had no obligation to seek approval from CRDA.” What’s more, in its brief, the city’s defense argued that the project was accompanied by a traffic study that examined its impact on traffic.

Trenk also addressed the concerns related to the claim about delays of emergency vehicles caused by the reduction of the traffic lanes. He explained that experts in Atlantic City, in collaboration with the state and transportation agency examined the proposed project, confirming it wouldn’t impact the flow of emergency vehicles. “Thus, Plaintiff cannot demonstrate any genuine irreparable harm at stake,” explained the city’s brief.

The city’s defense asked the court to deny the requests listed within the lawsuit filed by AtlantiCare and the casino operators. The case is set to return to court on January 26, 2024, when each of the parties will present their arguments in front of Judge Michael Blee.

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