Connecticut Files Criminal Charges Against High5Games

The past month or so has seen a tremendous backlash aimed at online sweepstakes casino operators. Everyone from attorneys general to legislators to gaming control boards has ramped up efforts to attempt to put the sweeps casino genie back in the bottle. 

However, Connecticut has taken what might be considered the nuclear approach, bringing 1,065 misdemeanor charges against sweeps operator High5Games. They also immediately suspended their license to provide legal online slot content to Connecticut iGaming operators FanDuel and DraftKings.

“We are disappointed that a licensed gaming service provider took advantage of Connecticut consumers by operating an illegal casino platform”

said DCP Gaming Division Director Kris Gilman in a press release.

The Department of Consumer Protection’s Gaming Division is handling the investigation, which found more than one hundred Connecticut residents who had voluntarily self-excluded from the state’s licensed casinos were allowed to sign up and lose more than $300,000. 

They also found another 900+ residents who were actively encouraged to game on the High 5 Casino website. However, it was not registered or licensed in the Nutmeg State, and these players collectively lost at least another 900K. Each count is a Class A misdemeanor, resulting in up to a year in jail on each count and a $2,000 fine.

This will be the first time that a Sweeps operator has faced criminal charges in the US, and the question that not only executives at High 5 must be asking but literally everyone in the Sweeps business must be pondering: Will it be the last?

Because cease-and-desist letters and the threat of new laws and regulations are one thing, criminal charges, even if they were only one charge and not a thousand, are another.

The subsequent legal fees, headlines, and potential loss of revenue from other gaming jurisdictions if they also begin to suspend the company’s license to provide legal online slot content will quickly mount. Other jurisdictions are now likely to scrutinize their self-exclusion lists to determine whether High 5 also enrolled or, worse, directly marketed to problem gamblers.

Attorneys general or gaming enforcement directors who want to make the point that they don’t want sweep operators in their states could easily bring more charges. This would forever change the calculus of potential profits vs. possible liabilities in a given state. 

For most states, the risk of criminal charges and potential forfeiture of revenue far outweigh any profit margins these operators might generate. Plus, the next state to act could throw in racketeering and RICO charges if they can show marketing to the most at-risk problem gamblers who have self-excluded. 

It may also signal a new turn as more than a half dozen states consider making sweepstakes casinos illegal. Mississippi has seen a version of a ban on the sweeps bill pass both Houses, though they await reconciliation. 

In Maryland, the Senate has passed a bill that would also ban sweeps, and the House will debate on Thursday whether to pass it as written or amend it. Other states, like Michigan and Florida, continue to issue cease-and-desist letters like candy, with Michigan sending out nine in just February. 

Evidence of predatory practices targeting problem gamblers and ignoring the most basic precepts of Responsible Gaming is probably just blood in the water for the many sharks currently circling sweep operators. However, this comes at a time when the industry is already grappling with negative publicity, and the exposure of over 1,000 misdemeanor charges will significantly complicate its future actions.