Arkansas Attorney General Tim Griffin has filed a lawsuit against VGW, the parent company behind Chumba Casino, LuckyLand Slots, and other platforms, accusing the business of operating an illegal online gambling enterprise within the state.
The lawsuit, announced on Monday, alleges violations of the Arkansas Deceptive Trade Practices Act and seeks restitution, penalties, taxes, and injunctive relief to halt the company’s operations that are purportedly in conflict with state gambling laws. VGW also operates other platforms, including LuckyLand Casino and Global Poker.
At the center of the dispute is the company's use of virtual currencies known as Gold Coins and Sweeps Coins. According to Griffin, customers purchase Gold Coins using real money and are then provided with Sweeps Coins as a bonus. The Sweeps Coins can be used to play casino-style games on the platform, where winnings can later be redeemed for cash.
VGW contends its business model is not gambling, Griffin stated in a press release. However, he argued that simply separating the purchased currency (Gold Coins) from the redeemable currency (Sweeps Coins) does not exempt the company from Arkansas gambling laws.
"Arkansas’s gambling laws are clear," Griffin said. "If you’re providing a means for Arkansans to gamble money within our state, you are subject to the rules and regulations that govern legal gambling."
Griffin compared VGW’s practices to those of so-called internet sweepstakes cafes, where customers purchase internet access and receive credits that can be used to play games for cash prizes. Courts have previously ruled that such arrangements qualify as gambling, rejecting claims that the primary purchase was internet access rather than the opportunity to gamble.
"Companies that operate gambling businesses in Arkansas are subject to our gambling laws, plain and simple," Griffin added.
No response from VGW has been included in the lawsuit's announcement, and details of the company’s defense, if any, remain unclear as of now.
The lawsuit aims to uphold Arkansas's strict regulations surrounding gambling, which limit legal gambling activities to specific state-authorized venues and operations.