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Read Full BioSweepstakes casino operator High 5 Games was denied its motion to dismiss a lawsuit in California that aims to shut down the website.
A judge in the San Francisco Superior Court tentatively denied the motion, which allows the case to proceed. The lawsuit was brought by Thomas Portugal, who claims High 5 Entertainment, the company behind High 5 Games and High 5 Casino, deceived him into depositing and losing money on the platforms.
Betting and gaming lawyer Daniel Wallach highlighted the decision on X, noting that Judge Christine Van Aken stated in the ruling: “Here, Portugal alleges an injury in paying money for an illegal service, and in being deceived by the service. That is enough for standing.”
High 5 attempted to get the case dismissed based on the argument that California has a longstanding policy of not making judicial rulings in civil lawsuits involving gambling losses. However, Judge Van Aken rejected this claim, stating: “This case is distinguishable because it seeks to enforce that public policy by prohibiting a gambling practice that Portugal alleges he was deceived into participating in.”
The lawsuit compares sweepstakes casinos such as High 5 to internet cafe sweepstakes and draws on a 2015 ruling against the businesses. In the case against cafe owners, the California Supreme Court ruled that the businesses were offering illegal gambling.
Portugal’s lawsuit also states that High 5 Entertainment “has scaled up, on a massive scale, an illegal tactic that criminals once attempted to use to evade state gambling laws.”
High 5 Faces Another Potential Payout
The decision to deny High 5’s motion to dismiss could result in the company being required to pay out more compensation. Last year, the operator was required to pay $25 million in damages in a case in Washington, as well as $1.5 million in Connecticut in May of this year.
In addition to the lawsuit in California, High 5 also faces a lawsuit in New Jersey, despite having exited the state in February of this year. The company has exited all seven states that allow legal online casinos due to increased regulatory scrutiny.
In addition, it has withdrawn operations from Idaho, Kentucky, Louisiana, Montana, Nevada, Washington, and New York. In total, there are approximately 18 states where the platform does not officially offer its services.
Lawsuits and Legislation Sweeping Away Sweepstakes
The lawsuits against High 5 come amid increased backlash against sweepstakes casinos. Wallach noted there are currently 58 lawsuits pending against operators, including VGW and Stake, as well as High 5.
New Jersey’s governor has now signed off on a bill banning companies from utilizing the dual-currency model to allow users to play casino games for prizes. Additionally, Montana, New York, Connecticut, and Nevada have enacted legislation targeting these platforms.
Several other states have also taken action, most commonly issuing cease-and-desist orders. In California, lawmakers are also considering a bill that will prohibit these platforms.
If legislation is successfully passed, it will likely force operators to withdraw from the country’s most populous state. Despite the legal challenges, many companies continue to thrive. Sweepstakes platform Modo Casino announced recently that it is entering NASCAR through a partnership with Spire Motorsports and Carson Hocevar’s No. 77 team.
