Baltimore Sues Sweepstakes Casinos, Claims They Offer Illegal Gambling

Filed March 4 in the Circuit Court for Baltimore City, a new lawsuit targets six major sweepstakes casino operators on the grounds that they have violated the city’s Consumer Protection Ordinance by offering casino-style games to residents even though online casino gambling is illegal in Maryland.

Baltimore Sues Sweepstakes Operators

VGW Holdings, B2Services, Yellow Social Interactive, Sweepsteaks Limited, High 5Games, and Blazesoft are all named in the lawsuit. At the center of the lawsuit is the industry’s “dual-currency” model.

According to the complaint, users purchase virtual currency — often referred to as “gold coins” — and, in return, receive a second currency, known as “sweeps coins,” as a bonus. The sweeps coins can then be used to wager on casino-style games and later redeemed for cash, prizes, or cryptocurrency.

Baltimore argues that this setup meets the legal definition of gambling: it involves consideration (payment), chance (random game outcomes), and a prize (cash redemption). The lawsuit also states that users must spend real money to buy the virtual currency and alleges that the sweepstakes currency can be exchanged for cash or prizes, effectively making it real-money gambling.

Baltimore also claims the platforms’ design and marketing are aimed at younger audiences. According to the complaint, the gambling products are presented in “colorful, cartoonish packaging,” animated characters, spinning treasure chests, and “leveling up” mechanics, which are borrowed from the style of mobile games popular with children and teenagers.

The lawsuit also points to celebrity endorsements, including singer Drake, along with promotions by social media influencers and advertising on platforms such as TikTok and YouTube, which attract younger audiences.

Baltimore Mayor Brandon Scott stated that the companies are targeting local communities, including young people and minors, and profiting while disregarding the law. He emphasized that no company, particularly those operating from overseas, should be allowed to make money in the city while violating laws and putting residents at risk.

More and More States Are Going Up Against Sweepstakes Casinos

Although it was only the second municipal civil enforcement action of its kind, Baltimore’s lawsuit comes amid a surge of class-action complaints targeting sweepstakes casinos. Court records indicate there are over 100 ongoing individual and class-action lawsuits against these operators. The defendants named in the Baltimore case are facing multiple legal actions, with VGW alone being involved in dozens of suits.

One of the most recent ones includes Maine, where lawmakers are moving to ban sweepstakes casinos by targeting dual-currency. 

Despite the increasing number of lawsuits, sweepstakes casinos have largely continued operating in various states. This is largely due to the arbitration clauses and class-action waivers included in their terms of service. As a result, government-led enforcement actions like Baltimore’s case may represent a more serious escalation for the industry.