California Court Denies High 5's Plea in Dispute over Casino Sweepstakes Litigation

In a significant development for the online gaming industry, High 5 Entertainment is currently embroiled in a legal battle that could set new precedents for the sector. The lawsuit, filed by plaintiff Thomas Portugal, alleges that High 5's online gaming platform misled him into spending money.

The case, which is part of a growing trend of legal actions against sweepstakes casinos, has seen several setbacks for High 5 Entertainment. The Superior Court of California has denied four motions filed by the company's legal team, indicating a tough road ahead.

The court's decision could have major implications for the industry, according to legal analyst Daniel Wallach. He notes that the ruling could influence the trajectory of the industry as regulatory pressure mounts.

High 5 Entertainment is not new to legal challenges. Due to this mounting pressure, the company has already withdrawn from certain US markets. The company is currently facing multiple legal challenges across several states, including New Jersey.

In the California case, the court agreed with Portugal that the dispute falls outside the scope of any arbitration agreement and that arbitration would be unconscionable. High 5 Entertainment had argued that a court, not an arbitrator, typically determines whether a dispute is subject to arbitration. However, the court did not concur with this argument.

Interestingly, the court did not find Portugal's argument that the contract itself is illegal and therefore void. This suggests that while the company's tactics may be questionable, the legality of the contract remains intact.

Critics view sweepstakes casinos as illegal online gambling operations. Assemblymember Jesse Gabriel of California has proposed Assembly Bill 831 to ban sweepstakes casinos in the state. If passed, California would be one step closer to joining other jurisdictions in regulating or banning these types of online gaming platforms.

High 5 Entertainment has previously resolved similar cases in Washington and Connecticut. However, the current legal landscape seems to be shifting, with courts increasingly sceptical of the industry's practices. Several similar lawsuits are still pending across the country, each with the potential to establish new legal precedents for the industry.

As the legal battle unfolds, the future of sweepstakes casinos remains uncertain. The industry will likely continue to face scrutiny and regulatory pressure, with potential impacts on both the companies involved and the players who engage with these platforms.