Posted on: November 12, 2024, 09:53h.
Last updated on: November 12, 2024, 10:16h.
An online sweepstakes website operating in California has been hit with a proposed class-action lawsuit.
Attorneys for plaintiff Dennis Boyle filed his proposed class-action lawsuit in Orange County Superior Court against Yellow Social Interactive, a Gibraltar-based gaming firm doing business in California as Pulsz.com. The online gaming platform bills itself as a free-to-play social casino.
Boyle’s lawyers say Pulsz.com is nothing more than an illegal online gambling outfit that needs to be immediately shut down to protect consumers.
Plaintiff brings this action under California’s Business & Professions Code seeking public injunctive relief to discontinue operation in California of the illegal gambling website, Pulsz.com. Defendant is an offshore criminal enterprise that owns and operates the website,” the complaint began.
Boyle is represented by Smith Krivoshey, a Boston-based firm specializing in class-action litigation. The law firm led a 2022 class-action lawsuit against Six Flags for the wrongful charging of membership fees during the COVID-19 pandemic that resulted in an $83.6 million settlement.
Sweepstakes Drama
The proposed class-action suit against Yellow Social and Pulsz.com is the third active sweepstakes case.
In October, a proposed class-action case was filed on behalf of plaintiff Stephanie Cox in Hartford Superior Court in Connecticut against VGW Holdings, a Malta-based company. VGW is behind several online gaming websites — also billed as social casinos or sweepstakes — operating in Connecticut, including the Chumba Casino, Global Poker, and LuckyLand Slots.
In each proposed class-action lawsuit, the attorneys argue that the online social websites are cleverly marketed gambling platforms. After players sign up for free and receive a complimentary allotment of tokens to play with, the platforms allow users to purchase a secondary currency to play with that can be redeemed for real money.
“Defendant claims that no purchase is necessary to buy Sweepstakes Coins. That statement is misleading because Defendant only provides a tiny number of Sweepstakes Coins that are instantly consumed by gambling,” the complaint in the California case read. “Nobody expects website users to limit their gambling to a few, complimentary Sweepstakes Coins, and free play incentives like those offered by Defendant are a typical ploy to entice gamblers to play.”
The most common way for users to obtain Sweepstakes Coins is to purchase Gold Coins. The more Gold Coins a user purchases, the more Sweepstakes Coins the user also receives. So, in effect, when a person buys Gold Coins, they are also buying Sweepstakes Coins,” the litigation continued.
VGW is also facing a federal class-action lawsuit alleging its online websites are illegal in Georgia.
Sweepstakes websites have come under much fire recently from the legal gaming industry, including its preeminent trade group, the American Gaming Association (AGA), which has called on Congress and state lawmakers to ban such gaming websites. Several state gaming regulatory agencies have also recently sent cease-and-desist letters to entities they believe to be unlicensed iGaming operators.
No Financial Damages in California
The Georgia and Connecticut lawsuits seek court orders for the online gaming websites to be taken offline. They also seek financial damages for the proposed classes.
In California, however, Boyle and anyone else who joins the class won’t be eligible for financial compensation. Prominent gaming attorney Daniel Wallach explained on X that’s because California’s Unfair Competition Law says public injunctive relief cannot be arbitrated.
“Put differently, public injunctions benefit the public directly by the elimination of deceptive practices, but do not otherwise benefit the plaintiff,” Wallach said.
