Zula and Sportzino Filing
According to the sweepstakes casinos, the law firms are trying to coerce a settlement of $1.5 million for 966 players via the American Arbitration Association (AAA). The complaint states that the preliminary investigation includes hundreds of claimants who have never used Sportzino or Zula.
Individuals are involved that did not accept terms and conditions, and they are not party to any agreement to arbitrate with Plaintiffs. It will be interesting to see if this case moves forward if the claims by Zula and Sportzino are true.
If the players listed in the filing were not members, this would seriously undermine the plaintiff’s case.
Retaliating Against Clients
The law firms are not staying quiet about the filing against them. They have stated that the sweeps casinos are operating illegally based on gambling laws and are retaliating against their clients by tabling their own arbitration claims.
The firms report that the operators changed the arbitration forum to ADR Chambers, a Canadian entity, within the platform’s terms and conditions. The attorneys argue that their clients are now facing a retaliatory arbitration claim in a new setting.
Supposedly, the operators are seeking compensation from former users who filed claims in the AAA instead of ADR Chambers as listed in the terms and conditions.
Can Sweepstakes Sites Continue Operating?
With so many issues connected to sweepstakes gaming, it begs the question of whether the industry can survive. Already, several operators have stopped offering services in states like Michigan and Connecticut due to cease-and-desist letters.
The legal theory involving sweepstakes gaming is said to be shaky and will certainly come into question in the coming months as legal cases are decided. The industry created the sweepstakes Social and Promotional Gaming Association (SPGA) to try to deal with issues regarding the industry, including legal opinions of operations.
According to an SPGA spokesperson, the logic for sweepstakes services is based on two pillars: promoting a consumer good (social casino coins) and how gambling is defined in the US. There is no question that the social casino coins are a bona fide consumer good. Over $40 billion has been spent in the last decade within the sweepstakes industry on gaming coins.
When it comes to the definition of gambling, that’s when it gets tricky. Gambling must include a game of chance, risking something of value, and a prize. The SPGA argues that because a free method of entry is provided, sweepstakes gaming does not include players risking something of value.
The SPGA is trying to mitigate issues by placing emphasis on consumer protection. A new Code of Conduct plan is in the works that will outline measures such as age verification, Know Your Customer, geolocation, and anti-money laundering policy.
The hope is that operators abide by the Code of Conduct, which will reduce negativity toward the industry and help ensure sweepstakes gaming is considered a legitimate form of entertainment.
