VGW, Apple, and Google Confront Illegal Gambling Lawsuit in NY

VGW, Apple, and Google are facing a significant legal challenge in New York’s Southern District Court, potentially shaking up the landscape of online gambling. The lawsuit, initiated on December 3, alleges that VGW’s platforms—Chumba Casino, LuckyLand Slots, and Global Poker—function as illegal online casinos under New York law. Specifically, the plaintiffs assert that the games offered on these platforms qualify as gambling since they are based on chance, and the devices used to access them effectively become gambling devices. Furthermore, Apple and Google are implicated in the suit for facilitating these activities by offering VGW’s apps in their stores and taking substantial portions of the revenue generated.

The crux of the lawsuit lies in VGW’s two-currency system, which enables players to purchase virtual currency to play games. This system, according to the plaintiffs, converts what might otherwise be seen as casual social gaming into full-fledged illegal gambling operations. This issue isn’t confined to New York, as similar legal actions have sprung up in various states, and regulators in places like Delaware and Michigan have taken steps to clamp down on these platforms. The American Gaming Association, along with the California Nations Indian Gaming Association, has voiced concerns over the potential negative financial impact on regulated gaming establishments

Adding fuel to the fire, the plaintiffs suggest that VGW has been able to dodge regulatory scrutiny by using overseas arbitration clauses, compelling users to settle disputes in far-off jurisdictions such as Malta. This maneuver makes it exceedingly difficult for plaintiffs to hold the company accountable, thus allowing VGW to continue operating in what the lawsuit deems as a regulatory gray area. Financial reports bolster these claims, indicating significant earnings for VGW in recent years, pointing to a lucrative operation in the crosshairs of this legal scuffle.

Nevertheless, VGW and its peers maintain that they are compliant with all relevant state and federal regulations. The Social and Promotional Gaming Association (SPGA), a representative body for the industry launched this year, argues that these lawsuits are part of the growing pains of a nascent industry. The SPGA contends that its members are diligent in adhering to legal frameworks, framing the lawsuits as temporary setbacks rather than indications of systemic illegality. Despite ongoing litigation, no court has definitively ruled against sweepstakes operations like those run by VGW, leaving the industry in a suspenseful limbo as it navigates through the complex web of legal scrutiny and regulatory pressures. This situation underlines the evolving nature of online gambling and the intricate balance between innovative