Sweepstakes casino operator High 5 Entertainment, known for running High 5 Games and High 5 Casino, suffered a legal setback in California as a San Francisco judge tentatively denied its motion to dismiss a lawsuit aimed at shutting down its operations in the state.
High 5 Fails to Dismiss California Legal Challenge
In San Francisco Superior Court, Judge Christine Van Aken ruled that the lawsuit brought by Thomas Portugal could move forward, despite High 5’s attempt to have it thrown out. Portugal accuses the company of misleading him into depositing and losing money through illegal gambling practices.
As noted by gaming attorney Daniel Wallach on X, Judge Van Aken wrote: “Here, Portugal alleges an injury in paying money for an illegal service, and in being deceived by the service. That is enough for standing.”
High 5’s defense cited California’s historical reluctance to intervene in civil suits involving gambling losses. However, the judge disagreed, stating: “This case is distinguishable because it seeks to enforce that public policy by prohibiting a gambling practice that Portugal alleges he was deceived into participating in.”
The lawsuit compares High 5’s model to that of internet café sweepstakes operators previously ruled illegal by the California Supreme Court in 2015. Portugal’s legal team claims that High 5 is reviving a similar business strategy—on a significantly larger scale—to sidestep state gambling laws.
Legal Troubles Continue to Mount
This latest development is part of a growing list of legal and regulatory challenges facing High 5 Entertainment. Although the judge tentatively dismissed claims against Acies Investment Fund, a 6.5% stakeholder in High 5, the plaintiff has been granted the opportunity to revise and refile those claims.
The motion to compel arbitration in the case remains unresolved.
In recent years, High 5 has faced costly penalties. In Washington state, the company was ordered to pay $25 million in damages last year. More recently, in May, it paid $1.5 million in Connecticut following similar allegations. A separate lawsuit is currently underway in New Jersey, despite the company ceasing operations there in February.
Amid increasing legal scrutiny, High 5 has withdrawn from all seven U.S. states that offer legal online casino gaming. Additionally, it has pulled out of states like Idaho, Kentucky, Nevada, and New York, reducing its footprint in roughly 18 states where it no longer operates.
Industry Faces Broader Regulatory Pressure
High 5 is not alone in facing pressure. Sweepstakes casinos as a whole are under growing scrutiny, with Wallach reporting that at least 58 lawsuits are currently pending against operators such as High 5, VGW, and Stake.
Several states—including Connecticut, Montana, Nevada, and New York—have passed laws targeting the dual-currency business model common among these platforms. In New Jersey, a new law has already banned the use of that model, and California legislators are currently considering similar measures.
If passed, such legislation could drive sweepstakes platforms out of the country’s largest state.
Despite these challenges, some operators remain active. Modo Casino recently announced a high-profile partnership with NASCAR’s Spire Motorsports and driver Carson Hocevar, signaling that, for now, the sweepstakes model is still racing forward—even as legal barriers rise.
Source:
“California: Superior Court judge denies High 5 Games motion to dismiss lawsuit”, linkedin.com, August 16, 2025
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