Chumba Parent VGW Pays $8M Settlement in New York for Operating Sweepstakes Casinos

Chumba Casino parent VGW Holdings has agreed to an $8 million settlement with New York Attorney General Letitia James to resolve her office’s investigation into the online sweepstakes gaming operator. New York State Attorney General Letitia James has secured an $8 million settlement from VGW. The company is a sweepstakes casino operator, the parent entity to Chumba Casino, Global Poker, and LuckyLand Slots. (Image: Shutterstock) James announced that her office secured $8 million from VGW and its affiliates, including Chumba Casino, Global Poker, and LuckyLand Slots, in a resolution stemming from her claims that the company ran unlawful online gambling in New York. VGW is one of the largest operators of sweepstakes casinos, controversial websites and apps that have been deemed unregulated gambling by lawmakers and attorneys general in nearly two dozen states. Our state’s gambling laws are designed to protect New Yorkers. Online sweepstakes casinos like Chumba Casino, Global Poker, and LuckyLand Slots posed a dangerous threat to New Yorkers and their financial and mental health. My office took action to stop these illegal platforms last year, and now we are holding VGW accountable for the damage done,” said James. Last year, James issued cease-and-desist letters to numerous sweepstakes casinos, including the three VGW properties. All 26 sweepstakes casinos complied with the order to exit New York. Sweepstakes Crackdown Sweepstakes casinos claim to be free-to-play social gaming platforms that sell a secondary digital token, commonly called sweeps coins, that can be played and redeemed for cash withdrawals. The Social Gaming Leadership Alliance (SGLA), a trade group that VGW is a member of, says sweepstakes casinos use the “freemium” business model that’s common in online and app-based games, where the game is free to play, but users may make purchases to enhance the experience. “Sweepstakes are traditionally intended to promote a bona fide good or service, in this case, to promote optional in-game purchases of digital tokens to extend and enhance their experience in free-to-play games. These promotions operate under the same marketing law as many well-known promotions,” the SGLA said. James disagreed, saying that the buying of sweeps coins to play games of blackjack and spin slot machines for the chance of winning money isn’t a marketing promotion but gambling. James said gambling on online sweepstakes casinos is “especially risky” because the platforms are not subject to state audits or regulatory oversight. “Without oversight, players have no way of knowing whether a sweepstakes casino’s games are rigged, whether it will be able to cover a winning bet, or whether it complies with the many other consumer protection measures required of legal, licensed casinos under New York law. Some New Yorkers lost tens of thousands of dollars through gambling on VGW’s platforms,” James said. Settlement Terms In paying New York $8 million in the civil regulatory settlement, the company avoids formal legal proceedings. The Assurance of Discontinuance resolves James’ investigation without litigation. Under the terms, VGW neither admits nor denies violating New York State gambling law. In exchange, James refrains from prosecuting the company for its business conduct before it ceased operations in 2025. However, moving forward, the settlement stipulates that James can prosecute VGW if the company violates the Assurance of Discontinuance terms. The post Chumba Parent VGW Pays $8M Settlement in New York for Operating Sweepstakes Casinos appeared first on Casino.org.