California Court Denies High 5 Entertainment’s Motions in Sweepstakes Casino Lawsuit

California Superior Court Rejects High 5’s Legal Motions

The Superior Court of California recently dismissed several motions filed by High 5 Entertainment’s legal representatives. These included requests to dismiss the amended complaint, challenge the summons service, and compel arbitration or start arbitration proceedings.

Details of the Lawsuit and Court Ruling

The lawsuit centers on a complaint by Thomas Portugal, who alleges that High 5’s online gaming platform misled him into spending money. In its ruling, the court determined that High 5’s attempt to move the dispute to arbitration was unjustifiable and described it as “unconscionable.”

High 5 argued that questions about whether a case should go to arbitration should be decided by an arbitrator if the parties agreed. However, the court found no clear delegation of this authority to an arbitrator in the agreement. The court emphasized that any disagreements must be resolved in court, not through arbitration.

Plaintiff Portugal challenged arbitration on three grounds: that his dispute falls outside any arbitration agreement, that arbitration would be unfair, and that the contract itself is legally void. The court agreed with the first two points but did not find the contract void.

Regarding the motion to dismiss on the grounds of improper service, the court considered the defendant’s inconvenience, the interests of California, and the plaintiff’s need for relief. It ruled that defending the case in California was only slightly inconvenient for High 5 and reaffirmed the state’s strong interest in upholding gambling regulations.

Potential Implications for the Sweepstakes Casino Industry

This case reflects a broader wave of lawsuits targeting sweepstakes casinos, which critics claim operate as illegal online gambling platforms. High 5 has faced similar legal challenges in states like Washington, Connecticut, and New Jersey, and regulatory pressures have led it to exit some US markets.

Legal expert Daniel Wallach has observed that this recent decision could significantly impact the future of sweepstakes casinos. With several lawsuits pending nationwide and new laws addressing dual-currency gaming methods, the industry confronts increasing legal risks. This case may help define legal boundaries for sweepstakes-style gaming in the United States.

California itself is moving toward stricter regulation of sweepstakes casinos. Assembly Bill 831, which proposes banning these operations, is gaining momentum within the state legislature, signaling growing opposition to sweepstakes-style gambling in California.