Sweepstakes casino operator High 5 Entertainment LLC has suffered a setback in a California lawsuit after a San Francisco Superior Court judge denied its motion for arbitration. This now allows the case to proceed in court.
For context, plaintiff Thomas Portugal is seeking public injunctive relief, asking the court to shut down High 5’s online sweepstakes casino in California. That’s rather than seeking monetary damages, and that distinction was central to the judge’s recent ruling.
Portugal’s overall claim is that High 5 Casino functions as an illegal gambling operation; players buy virtual coins to play casino-style games, which Portugal argues amounts to unlicensed gambling.
It’s a claim we often see in lawsuits against sweepstakes casinos, and many such cases are quickly shifted to private arbitration. This means the two parties resolve the dispute outside of court, and this prevents plaintiffs from pursuing broader public remedies that could impact the company’s operations.
It’s made possible by sweepstakes casinos including an arbitration clause in their terms of service. So what’s different in this High 5 case?
Judge Agrees That Arbitration Clause is Unfair
High 5 submitted a motion to move the case to arbitration as usual, but the plaintiff argued that:
- The arbitration clause was ‘unconscionable’ – this means the clause is one-sided and unfair.
- The dispute was beyond the bounds of the arbitration clause – the clause does not account for a scenario requesting public injunctive relief, only damages.
As the judge agreed with both of the above points, High 5’s motion for arbitration was rejected.
It’s the third request of High 5’s that the judge has denied in this case, after earlier rejecting a motion to dismiss for failure to state a cause of action and for lack of personal jurisdiction.
So High 5’s options are narrowing somewhat as we reach a stage rarely seen in suits against sweeps casinos. That said, the company will likely try to settle rather than face a public trial, which would bring the company and the whole sweepstakes format under intense scrutiny.
High 5’s Other Notable Court Battles
This case is reminiscent of High 5’s battle with Connecticut’s Department of Consumer Protection (DCP) that ended earlier this year. In that suit, Connecticut’s regulator alleged that High 5 was operating illegally under state law, and the two parties eventually agreed on a settlement totalling around $1.5m.
It’s notable that since then, Connecticut has become one of a handful of states to outlaw sweepstakes casinos; it’s also interesting that California looks to be going down the same path with its own anti-sweeps bill in the form of AB831.
However, the Connecticut settlement was nothing compared to the $25m High 5 was ordered to pay by a Washington court in February. That was part of a class action suit stretching back to 2014 centered around High 5 offering illegal casino-style Facebook games in Washington – a notoriously strict state when it comes to gambling.
High 5’s track record by this point almost makes them the ‘poster child’ for social casino lawsuits. It’s perhaps because the company has been in the social and sweepstakes space for longer than most and is also a widely-recognised brand, making it an easy target for litigation. Concrete past judgements also give plaintiffs solid leverage in future cases.
Even with this legal exposure, High 5 still operates a successful sweepstakes platform in most US states, even winning Social Gaming Operator of the Year at the EGR North America Awards in 2024.
But in 2025, the sweeps format has come under the microscope like never before, and big operators in the space are becoming starkly aware that litigation attempts are now the cost of entry to the market.
We’ll keep you updated on the Portugal vs High 5 case, plus other major developments in the sweepstakes casino space.
Author: Joseph Allen
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