Connecticut’s Department of Consumer Protection (DCP) has announced a $1.5m settlement with High 5 Entertainment LLC and High 5 Games LLC – it’s in relation to an investigation into High 5’s sweepstakes platform operating in the Constitution State.
High 5 Casino withdrew from Connecticut – and multiple other states – earlier this year, but prior to that, it had been operating there. Connecticut is one of the seven US states that permits real money online casinos, and so far has only awarded licenses to two real money online casinos. Because of this, the DCP is motivated to chase out operators it deems illegal, and with a dual-currency model that exists in a gray area, the regulator saw it fit to make an allegation that High 5 was operating its sweeps casino illegally.
Notably, other major sweepstakes casino brands – such as Stake.us and VGW – have historically avoided the jurisdiction, likely due to its strict stance on gambling. High 5, by contrast, opted to test those boundaries and eventually suffered the consequences.
Breakdown of Settlement Figure
The settlement amounts to around $1.5m in total, with around $650,000 being paid back to past users of the platform in the state whose “purchases on High 5 Casino exceeded the amount of sweepstakes redemptions”. The remaining sum of around $800,000 goes to the Consumer Protection Enforcement Fund, which protects and educates Connecticut residents on gambling issues.
One point of contention in particular was the fact that High 5 accepted wagers from some players who had signed up for the Voluntary Self-Exclusion List. This is a state service that allows residents to remove themselves from gambling activities if they’re experiencing addiction or other similar problems. However, as High 5 was not part of the state’s regulated ecosystem, it wouldn’t have been privy to the data on the list, and as a result, many self-excluded individuals were able to play on the platform.
High 5 is not just a sweepstakes casino operator; it has a background as a gaming provider, including the supplying of games to the two licensed online casinos in Connecticut, which are DraftKings/Foxwoods and FanDuel/Mohegan Sun. Therefore, when the violations were initially alleged in March, High 5’s license as a supplier was suspended. The DCP’s Gaming Division has now confirmed that the license has been reinstated following the settlement being agreed upon.
“This case is just one example of the hard work our Gaming Division does to ensure a fair, safe and legal gaming market in Connecticut,” said DCP Commissioner Bryan T. Cafferelli.
It’s still difficult for regulators – and even plaintiffs in private cases – to prove that sweepstakes casinos are technically illegal, and High 5 has admitted no legal wrongdoing in this case, but has shown full cooperation with the regulator. This is likely to maintain good standing in relation to its gaming provision for the state’s licensed casinos.
It has also committed to quarterly compliance reporting until April next year, as well as agreeing not to offer or license games to other sweeps casinos operating in the state unless explicitly approved by the state. That’s right, many other, less well-known sweepstakes casinos such as Zula, McLuck, and Fortune Coins are still operating in Connecticut, and it remains to be seen if they will be targeted by a regulator that’s not afraid to flex its muscles.
Bill with Anti-Sweeps Wording Also Being Debated in Connecticut
Relatedly, the DCP will likely be crossing its fingers for the success of SB1235, a bill which recently passed the Connecticut Senate.
It’s a wide-ranging proposal that looks to:
- Ban lottery ticket couriers
- Allow the state to enter into gaming compacts with other states
- Clarify laws around gambling advertising
- Ban any unlicensed company that “facilitates participation in any real or simulated online casino gaming or sports wagering”, designating this as a felony
It’s the last point that would give the regulator, law enforcement, and prosecutors more power with a clearer line drawn in the state’s laws relating to gray area enterprises like sweepstakes casinos. However, with the state’s legislative session coming to an end in two days, and passage through the House only just beginning, it’s unlikely SB1235 will make enough progress in time.
Author: Joseph Allen
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