VGW Appeals Order to Remand Sweepstakes Lawsuits in Tennessee

Sweepstakes casino operator VGW has appealed a judge order in Tennessee that remanded sweepstakes lawsuits back to state court. The lawsuits concern players who seek to recover their losses from unlicensed sweepstakes operators.

VGW Is Bullish on Protecting Its Interests

According to gambling law expert Daniel Wallach, VGW has appealed the order which remanded the lawsuits back to state courts. He noted that the lawsuits concern individual plaintiffs who seek to recover the money they lost to the operators.

Wallach pointed out that the plaintiffs in question are claiming that VGW and other sweepstakes operators should return them the money they spent because their products constitute “illegal gambling.”

While the Class Action Fairness Act (CAFA) seeks to prevent class action abuse, the lawsuits in question have been filed by individuals on behalf of the government – also known as qui tam lawsuits.

Wallach explained that, unlike class actions, qui tams are not covered by the CAFA, cannot be removed to federal court and are protected from dismissal due to mandatory arbitration.

Sweepstakes Under Increasing Scrutiny

Losing the lawsuit could mean that VGW and other sweepstakes companies may be forced to repay the losses players in Tennessee incurred since the operators started serving the state. Other operators named in the lawsuit include DoubleDown, Playtika, Playstudios, Sciplay and SpinX.

VGW appealed the motion, claiming that plaintiffs were trying to misuse Tennessee’s anti-gambling law. According to the operator, its social gaming products do not constitute gambling. In addition to that, VGW complained that the lawsuit in Tennessee seeks to recover the losses of all players in the state, instead of those of the plaintiff only.

VGW’s effort to appeal the order comes amid increased scrutiny of the US sweepstakes market. While regulated US jurisdictions have suffered sweepstakes operators for some time, they have recently begun a mass crackdown on such businesses on the grounds that their activities constitute illegal gambling.

Sweepstakes bear some inherent similarities to traditional gambling but try to shake up the formula a bit in order to avoid regulatory scrutiny. While some agree that sweepstakes are not quite gambling, many do not.

As the pushback against the sweepstakes market continues, several operators joined forces to form the Social and Promotional Gaming Association (SPGA), a body that will promote responsible sweepstakes gaming and support the industry’s interests.