A Georgia judge has thrown out attorney Barry Williams’ third attempt to bring a class action lawsuit against the sweepstakes giant VGW.
Judge Thomas Thrash of the Northern Georgia District Court dismissed Destiny Kennedy’s lawsuit against VGW, which alleged that VGW was operating an illegal online gambling business in the state.
Kennedy also claimed that she had specifically opted out of the binding arbitration element of VGW’s terms and conditions. However, the sweeps operator countered that though she opted out the first time, she did not opt out when terms and conditions were updated a few weeks later.
In summing up the case, Thrash also agreed with VGW’s argument that the Georgia court did not have jurisdiction to hear the case.
He said: “The Plaintiff does not identify any actions taken by VGW Group that were expressly aimed at Georgia. VGW Group does not purposefully target or direct any marketing or other business activities specifically toward Georgia residents.”
Thrash also determined that Kennedy was wrong in claiming that opting out of arbitration also included opting out of jurisdictional preference.
VGW’s terms and conditions specify all court cases must take place in either Delaware federal court or Malta.
Third time unlucky
Judge Thrash has ruled on two other cases brought by Williams against VGW in recent years.
In 2023, he brought a case with a John Doe plaintiff, however, Thrash deemed that the plaintiff had clearly agreed to binding arbitration in the terms and conditions, meaning that the case needed to go to arbitration.
Williams tried again in 2024 with a lawsuit filed by the Fair Gaming Advocates Georgia Inc, a group seeking to pursue VGW and other sweepstakes via class action lawsuits.
Similarly to the most recent case involving Kennedy, Thrash deemed that his court lacked jurisdiction and, therefore, he dismissed the case.
Following the judgement, Kennedy has not been given the option to amend her complaint.
Shareholder unrest
The Georgia court’s decision will be one less headache for VGW at a time when it is facing significant shareholder unrest amid founder Laurence Escalante’s efforts to take the company private.
Earlier this month, Escalante confirmed his ‘best and final’ offer of AU$5.05 per share, which values VGW at approximately AU$3.2bn (£1.5bn).
Although successful in this case, Escalante did acknowledge the uncertain future of the sweepstakes industry in the US in his note to investors following his offer, citing the efforts of lawmakers and regulators to curtail the sector via legislation and cease and desist letters sent to operators.
“The regulatory and competitive environment in which our business operates is becoming increasingly uncertain, and the risks have markedly increased over the past 24 months,” Escalante told investors.
“While I remain confident in VGW’s business and believe that BidCo and VGW will be strongly positioned to create and deliver value in the casino-themed social games market, we are also conscious of the risks in the regulatory and competitive environment in which we operate.”
Voting will now take place on 30 July to decide if shareholders accept the scheme set forth by Escalante.
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