VGW Pays $8M to Settle New York Illegal Sweepstakes Casino Inquiry

VGW Holdings, the parent company of Chumba Casino, will pay $8 million to settle an investigation by New York Attorney General Letitia James into its online sweepstakes casino operations.

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.

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.

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.

In a statement to Casino.org, VGW said:

“VGW welcomes the conclusion of this matter. As communicated to our New York players in May 2025, and detailed in the Assurance, VGW voluntarily ceased allowing players to collect Sweeps Coins through any method on 2 June, 2025, as part of a phase-out of Promotional Play (Sweeps Coins) in the State and in anticipation of new legislation relating to sweepstakes that took effect later that year.

VGW appreciates the NYAG’s recognition of VGW’s cooperation throughout its investigation and looks
forward to continuing to operate its online social games in the State of New York solely through Gold
Coins play. VGW also notes the Assurance states that it is “not intended, and should not be construed, as an admission of liability” by the company.

VGW has operated in the US for more than a decade, creating not only great games, user experiences, and entertainment for millions of Americans but ensuring this is done safely, responsibly, and at the highest level of standards. We remain committed to respectful engagement in establishing modern, appropriate regulatory structures that benefit players and states alike.”