Court Denies High 5’s Legal Motions
The social casino’s departure coincides with recent courtroom losses that have weakened its legal position in California. On September 3, San Francisco Superior Court Judge Anne-Christine Massullo denied High 5’s motion for arbitration in a lawsuit filed by plaintiff Thomas Portugal, who alleges that High 5 Entertainment misled him into spending money on what he claims is an illegal online casino operation.
This decision followed another setback in August when Judge Christine Van Aken rejected High 5’s motion to dismiss the same case entirely. The consecutive legal defeats have left the sweepstakes operator with limited options to avoid costly litigation in the state.
AB 831 Threatens Industry-Wide Ban
Beyond individual lawsuits, the entire sweepstakes casino sector faces an existential threat from California’s AB 831, a bill designed to ban sweepstakes casinos statewide. The legislation recently advanced from the Senate Appropriations Committee and is now heading to the Senate floor, where a simple majority vote would send it back to the Assembly for final approval.
The bill passed the Assembly with a unanimous 77-0 vote, demonstrating strong bipartisan support for eliminating sweepstakes casinos from California. If passed by the Senate, the legislation would land on Governor Gavin Newsom’s desk for his signature.
California Represents Major Revenue Source
High 5’s exit from California is particularly significant given the state’s outsized importance to the sweepstakes casino industry. According to research from Eilers & Krejcik Gaming, California accounts for approximately 17% of total U.S. sweepstakes casino revenue, making it the largest single market for these operators.
For High 5 specifically, losing access to California means forfeiting nearly one-fifth of the potential U.S. market. However, the company remains operational in 35 other states where sweepstakes casinos continue to operate legally.
Impact on Current Players
Existing High 5 Casino players in California have until September 15 to use their remaining sweeps coins and redeem any prizes. After that date, the platform will be completely offline for California residents. New account registrations ceased on September 3, and current players cannot make additional purchases.
Industry-Wide Implications
High 5’s withdrawal signals broader challenges facing the sweepstakes casino industry in California. The move follows Playtech’s decision earlier in the week to remove its games from all California-based sweepstakes casinos, including popular platforms like Chumba Casino.
Other major operators still active in California may now reassess their own positions, particularly as legal challenges mount and regulatory uncertainty increases. The combination of successful lawsuits and advancing anti-sweepstakes legislation creates a hostile environment for these businesses.
Additional Legal Challenges
The pressure on sweepstakes operators extends beyond High 5’s specific case. Last month, Los Angeles City Attorney Hydee Feldstein Soto filed a lawsuit against Sweepsteaks Ltd., the company behind Stake.us and the Kick streaming service. The suit accuses the company of conducting illegal online gambling, false advertising, and violating California’s Unfair Competition Law.
Tribal Opposition to AB 831
Despite the legislative momentum behind AB 831, some opposition has emerged from California’s tribal gaming community. The Kletsel Dehe Wintun Nation, Sherwood Valley Rancheria of Pomo Indians, and Mechoopda Indian Tribe of Chico Rancheria have all protested against the sweepstakes ban, though the impact of their opposition on the bill’s progression remains uncertain.
Looking Ahead
High 5 Casino’s strategic retreat from California may prove prescient if AB 831 becomes law. By exiting now, the company avoids the costs and risks associated with continued legal battles while positioning itself to focus resources on more favorable jurisdictions.
The operator’s experience serves as a cautionary tale for other sweepstakes casinos operating in states with evolving regulatory landscapes. As legal frameworks continue to shift, operators must carefully balance market opportunities against regulatory risks.
For California players seeking sweepstakes casino alternatives, several operators remain active in the state, though their long-term viability depends heavily on the outcome of AB 831 and ongoing legal challenges. The sweepstakes casino industry’s future in California hangs in the balance as both legislative and judicial processes continue to unfold.
Blaise Luis
