High 5 Entertainment Loses First Round in California Lawsuit

A California judge has made a tentative ruling against High 5 Entertainment in a case that might shake up sweepstakes-style casinos operating in the state.

San Francisco Judge Allows Lawsuit Claiming High 5 Misled Player to Move Forward

On August 14, Judge Christine Van Aken of the San Francisco Superior Court refused to throw out claims brought by plaintiff Thomas Portugal, who says High 5‘s online gaming platform tricked him into spending money. The court minutes show that the judge thought Portugal’s claims about losing money and being deceived were strong enough to let the case continue.

High 5 claimed that California law stops courts from getting involved in civil disputes about gambling. Their defense relied on past cases that said people cannot get their gambling losses back in court. However, Judge Van Aken did not buy this argument. She said the reasons behind those old rulings did not fit this case because the plaintiff says he was fooled into joining what he calls an illegal plan.

The court also looked at High 5’s claim that Portugal could not sue under California’s Unfair Competition Law. Judge Van Aken disagreed with this, too. She pointed out that the complaint said Portugal lost money from an unlawful service, which was enough to keep the case going under state law.

While the court rejected High 5’s motion to dismiss, the decision provided some relief to one of its financial supporters. Acies Investments Fund I, which owns a small part of High 5, got the claims against it thrown out, though the plaintiff can still change the complaint.

California Lawsuit Could Set Precedent for Sweepstakes Casino Industry

The case is one of many challenges across the country against sweepstakes casinos, which some say are just like illegal online gambling operations. High 5, which earlier settled cases in Washington and Connecticut, now has to deal with lawsuits in several states at once, including New Jersey. The company has already left some US markets because of increased pressure from regulators.

Legal expert Daniel Wallach, who has been keeping tabs on the case, pointed out on X (formerly Twitter) that the decision could be a game-changer for the whole industry.

With a bunch of similar lawsuits waiting in the wings across the country and new laws taking aim at two-currency gaming setups, sweepstakes companies are facing more and more unknowns. For the time being, the California lawsuit against High 5 will keep going, and there is a chance that future decisions could change how these platforms do business in the state.