Kentucky’s VGW Lawsuit Takes A Different Route Than Other States

What Kentucky Is Alleging

According to the complaint, players use two forms of virtual currency: Gold Coins, which are used for social play, and Sweeps Coins, which can be redeemed for cash prizes on a near 1:1 US dollar basis.

The state argues that players are effectively gambling because they risk something of value for the chance to win money.

“This company may use new technology and a new scheme to hide, but the reality is the same,” Coleman said when announcing the lawsuit. “Our Office has a duty to stop illegal gambling in Kentucky regardless of how it’s packaged.”

The complaint also accuses VGW of targeting Kentucky residents with advertising while knowing they were located in the state. It cites celebrity partners including Ryan Seacrest and Michael Phelps, as well as a Formula 1 sponsorship with Scuderia Ferrari, as part of what the state describes as misleading marketing practices.

VGW disputes the allegations.

“We respectfully reject the Kentucky Attorney General’s claims and plan to vigorously defend this lawsuit,” a company spokesperson said after the case was filed.

VGW maintains that its Social Plus model is lawful because Sweeps Coins cannot be purchased directly and can also be obtained without making a purchase.

What Kentucky Wants From The Court

Kentucky is asking the court to stop VGW from operating in the state, order repayment of money it says was unlawfully obtained and impose civil penalties that could reach $25,000 for each gambling device involved in the alleged violations.

The complaint also seeks penalties under Kentucky’s Consumer Protection Act, including higher fines where violations involve people aged 60 or older.

Kentucky notes in its complaint that VGW generated $2.8 billion in revenue during 2024, highlighting the size of the business at the centre of the lawsuit.

Why Going Straight To Court Matters

Over the past two years, regulators and attorneys general have commonly begun challenges to sweepstakes casino operators with cease-and-desist letters. Kentucky went directly to litigation.

A cease-and-desist letter asks an operator to stop. A lawsuit asks a court to decide the issue and can bring legal costs, court deadlines, potential penalties and judicial oversight from the outset.