A new class action lawsuit in California is challenging the idea of a sweepstakes sportsbook. The sweepstakes model has been used for poker and online casino for years, but now that groups like Fliff are applying it to a sportsbook model, it is drawing legal attention.
Fliff is the defendant named in a class action lawsuit filed by Bishoy Nessim in the Central California District Court. Nessim alleges that Fliff is running a de facto illegal sportsbook in the state. While there is a free-to-play option with a currency called Fliff Coins, there is another type of currency, Fliff Cash, which can be cashed out on a dollar-for-dollar basis.
Additionally, the lawsuit alleges Fliff players can purchase Fliff Cash directly. The complaint broke down why it thinks Fliff does not meet the standard of a sweepstakes product, as sweepstakes are defined as “any procedure for the distribution of anything of value by lot or by chance that is not unlawful under other provisions of the law…”
Per the complaint:
“Just like in any traditional sportsbook, the user picks the sporting event to bet on based on the published odds of a particular team winning (or the spread, moneyline, or over/under totals). The user then places a bet with Fliff Cash and winning or losing is a function of the outcome of the sporting event and the user’s choices, ie whether they picked the right team or the right odds for that sporting event. There is no distribution of a thing of value ‘by lot or chance.'”
Since California does not have legal sports betting, the complaint contends the app is in violation of the law.
The complaint lists the questions it hopes to resolve:
Whether Fliff is an illegal sportsbook under California law?
Whether Fliff violates the Wire Act?
Whether Fliff was unjustly enriched by operating an illegal sportsbook in California?
Whether Fliff Cash is a thing of value under California law?
Whether Fliff should be enjoined from selling Fliff Cash?
Whether the Plaintiff and the Class are entitled to rescission and restitution?
This is not the only state where Fliff is potentially facing legal recourse. Ohio regulators listed Fliff as one of the five websites the Ohio Casino Control Commission reached out to for more clarity on how their businesses worked.
SBC Americas reached out to Fliff for comment but did not receive a response at time of publication.