Georgia Court Dismisses Lawsuit Against VGW, Dismissal Cites Lack of Jurisdiction
A lawsuit filed against VGW Holdings Limited and its subsidiaries, operators of online sweepstakes casinos, has been dismissed by a U.S. District Court in Georgia. The case, brought by Fair Gaming Advocates Georgia Inc., sought compensation for gambling losses incurred by residents of Georgia over the past four years, alleging that VGW’s operations violated state gambling laws.
However, the court determined that it lacked jurisdiction over VGW, agreeing with the company’s request for dismissal. The court ruled that VGW’s limited connection to Georgia—specifically, two non-executive employees residing in the state—was insufficient to establish legal jurisdiction under Georgia’s long-arm statute. The fact that VGW’s websites were accessible to Georgia residents was deemed insufficient to classify the company as “transacting business” in the state.
VGW’s legal argument was supported by the court’s finding that the company did not target Georgia users directly. There was no evidence that VGW engaged in advertising or solicitations within the state. VGW operates popular social gaming platforms, including LuckyLand Slots and Chumba Casino, which utilize virtual currencies and sweepstakes promotions to comply with federal and state regulations.
Despite this win, VGW’s legal challenges are far from over. The company is still facing lawsuits in other states, such as New York and Connecticut, where plaintiffs argue that VGW’s games blur the lines between legal sweepstakes and prohibited gambling activities. These lawsuits focus on VGW’s game structure, where users buy virtual currency for a chance to win cash prizes. Critics contend that this setup resembles traditional gambling.
Although the Georgia ruling may influence similar legal challenges in other jurisdictions, VGW can consider this decision a significant victory. The ruling shields VGW from further legal proceedings in Georgia, but the company remains under scrutiny in other states. The outcome highlights the ongoing debate surrounding the legal status of sweepstakes casinos.
In related news, the Social and Promotional Gaming Association (SPGA) has introduced a new Code of Conduct aimed at improving industry standards for sweepstakes casino operators. While VGW is not a member of the SPGA, the new code may play a role in shaping the regulatory environment for the sweepstakes gaming industry, which continues to face challenges as courts and regulators examine its legal standing.
