Sweepstakes Company Blazesoft Hit with Class Action Lawsuit in New York

Blazesoft Ltd., the Canadian company behind several successful online sweepstakes casinos, now faces substantial legal scrutiny. A class action lawsuit filed in the US District Court for the Southern District of New York alleges that the company and its affiliated brands have been running unlawful gambling under the guise of sweepstakes entertainment.

The Platforms Allegedly Operated Like a Casino

The legal complaint, filed by Autumn Boatner and representing a collection of New York residents, targets three primary Blazesoft platforms: Sportzino, Zula Casino, Fortune Coins, and their operating arms. The lawsuit revolves around the allegation that the platforms use a dual currency system to circumvent New York’s stringent gambling laws.

Players using these websites purchase virtual “Gold Coins” for entertainment use. However, these purchases come with bonus “Sweeps Coins” or “Fortune Coins” that can be wagered on games of chance and, crucially, redeemed for real money. Boatner’s attorneys contend that this mechanism is a clever workaround intended to replicate a sweepstakes model legalized by law while secretly operating as a full-blown online casino.

If users win Sweeps Coins after wagering them on these games, they can be redeemed for real currency much like casino chips can be exchanged for cash in a brick-and-mortar casino.

Autumn Boatner vs Blazesoft Ltd.

The platforms mentioned in the lawsuit include offerings similar to traditional casino staples like online slots, bingo, and other games of chance. State law defines an activity as gambling if it involves betting something of value on an uncertain event. The lawsuit contends that the requirement to purchase Gold Coins to access the redeemable sweepstakes currency means real money is on the line.

Sweepstakes Face Increased Scrutiny Nationwide

Boatner’s complaint also condemns the platforms’ aggressive and misleading social media marketing strategies and their lack of responsible gambling tools. The lawsuit also notes that players as young as 18 can participate despite New York’s minimum legal gambling age of 21. Boatner also complains about complex and often ambiguous payout requirements, forcing users to keep paying to become eligible for a cashout.

Defendants allow anybody over the age of 18 to gamble on its casino platforms in complete disregard of the laws barring individuals under the age of 21 from gambling.

Autumn Boatner vs Blazesoft Ltd.

Blazesoft’s legal woes coincide with rising regulatory scrutiny regarding sweepstakes in the USA. New York has been one of the most active states in cracking down on this business model. Legislation introduced by State Senator Joseph Addabbo Jr. aims to ban sweepstakes casinos in the state. High-profile platforms like Real Prize have already responded to these developments, announcing their exit from New York.

If successful, the lawsuit against Blazesoft could accelerate the exodus of online sweepstakes casinos from New York and potentially invite similar legal action against other companies in the sector. As the sweepstakes model faces an increasingly hostile regulatory environment, it is becoming increasingly clear that such businesses must adapt to the new reality or risk exiting key US markets.