Another supplier has withdrawn from the California sweepstakes market amid a landmark gaming lawsuit.
The VGW-operated Chumba Casino confirmed to players yesterday (3 September) that it would be removing some games in California, including Playtech’s Tsai Shen’s Gift Fire Blaze, Mega Fire Blaze: Big Circus and Oink Oink Oink.
This decision comes as a number of suppliers, not including Playtech, have been engulfed in the legal challenge of Stake.us’ California operations, brought by the Los Angeles City Attorney.
One of the suppliers that was named is Pragmatic Play, and earlier this week, the studio took the drastic decision to end the supply of all its games to the US sweepstakes market.
A Pragmatic Play spokesperson told iGaming Expert: “Pragmatic Play has chosen to discontinue licensing its games to sweepstake operators in US States where restrictions were not already in place, in light of regulatory developments and evolving legislation.
“We remain committed to the highest standards of compliance and will continue to engage transparently with regulators.”
Evolution, also named in the legal action, took the decision to pull its content from Stake.us in California.
Landmark legal battle
Although there has been well-documented opposition of the sweepstakes market across the US, including the banning of the vertical in three US states, this latest action represents a marked difference as it is the State of California suing the companies named, and not an individual.
The suit accuses Stake.us of operating “one of the largest and most profitable illegal gambling enterprises in California’s history”, and accuses the suppliers of aiding and abetting the same enterprise.
If the suit is successful, consequences for those named could include civil penalties of up to $2,500 per violation. According to legal expert Daniel Wallach, financial penalties from the case “could easily tally hundreds of millions” given the scale of Stake.us’ operation.
At the same time, legislators in California are also considering Bill AB 831, which seeks to criminalise sweepstakes operators and those who supply the vertical.
Earlier this week, the legislation moved a step closer to success when it advanced out of the Senate Appropriations Committee, and it will now be considered by the full Senate.
iGaming Expert Analysis: The latest developments could signal the sweepstake vertical is approaching its final chapter in the Golden State, as a growing number of big name suppliers shift away from the sector. With the legal challenge ongoing, we now sit at a vital crossroads for the sector.
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