Baltimore Takes Legal Action Against Sweepstakes Casinos Alleged to Violate Gambling Laws
Baltimore Files Lawsuit Against Sweepstakes Casino Operators
On March 4, a lawsuit was initiated in the Circuit Court for Baltimore City targeting six prominent sweepstakes casino operators. The suit alleges that these companies breached Baltimore’s Consumer Protection Ordinance by offering casino-style gambling games to residents, despite online casino gambling being illegal in Maryland.
Details of the Lawsuit and the Dual-Currency System
The defendants named include VGW Holdings, B2Services, Yellow Social Interactive, Sweepstakes Limited, High 5Games, and Blazesoft. The core issue revolves around their use of a “dual-currency” model. In this system, players buy virtual currency, commonly called “gold coins,” and receive a bonus currency known as “sweeps coins.” These sweeps coins are used to play casino-like games and can later be redeemed for cash, prizes, or cryptocurrencies.
The city argues that this setup qualifies as gambling because it involves three key elements: payment (buying the virtual currency), chance (random game outcomes), and a prize (cash or equivalent value). The lawsuit emphasizes that users spend real money to acquire the coins and that the sweeps coins effectively function as cash when redeemed, constituting illegal gambling under Maryland law.
Concerns Over Marketing Practices Targeting Youth
In addition to the gambling aspects, Baltimore contends these platforms are deliberately designed and marketed to appeal to younger audiences. The complaint highlights the use of vibrant, cartoon-like visuals, animated characters, and game mechanics like “leveling up” — features that mimic popular mobile games enjoyed by children and teenagers.
The lawsuit also draws attention to celebrity endorsements, including singer Drake, and promotions by social media influencers on platforms such as TikTok and YouTube, which further attract younger users.
Baltimore Mayor Brandon Scott condemned these practices, stating that these companies target local communities, including minors, while making profits in violation of the law. He stressed that no business, especially those operating internationally, should be allowed to operate unlawfully and jeopardize the wellbeing of city residents.
Growing Legal Action Against Sweepstakes Casinos Nationwide
This lawsuit marks one of the early municipal civil actions against sweepstakes casinos, coming amidst a growing wave of lawsuits against similar operators nationwide. There are currently over 100 ongoing individual and class-action suits against these businesses. The defendants in Baltimore’s case, particularly VGW, face numerous legal challenges across different jurisdictions.
For example, lawmakers in Maine are taking steps to prohibit sweepstakes casinos by specifically targeting their dual-currency systems. Despite the surge in legal challenges, many sweepstakes casinos continue to operate in various states, partly due to arbitration agreements and class-action waivers in their terms of service.
Government enforcement efforts like Baltimore’s lawsuit may represent a more stringent approach to regulating this controversial industry in the future.
