High 5 Games regains Connecticut licence, agrees to discontinue sweeps across state
Nearly three months after a Connecticut agency issued a summary suspension against High 5 Games over allegations of rampant illegal gambling violations, the company has agreed to cease operation of its online casino in the Nutmeg State.
Under a comprehensive settlement with the state’s Department of Consumer Protection, High 5 Games agreed to pay a fine of nearly $1.5 million, the agency announced on Thursday. While High 5 Games discontinued operations of High 5 Casino across the state, the DCP reinstated High 5 Games’ online gaming service provider licence, effective 22 May.
Although High 5 Games offers licensed gaming products throughout Connecticut, the state has not licensed High 5 Casino, an online platform. A licensed supplier in the state since 2021, High 5 Games provides licensed gaming content to both the FanDuel and DraftKings online casino sites. There is a vast disparity between High 5 Games, a licensed supplier in Connecticut, and High 5 Casino, an unlicensed sweepstakes operator. When the DCP issued charges against High 5 Games in March, it apparently marked the first time a state brought criminal charges versus a US sweepstakes casino.
No admission of liability
In a six-page settlement dated 22 May, the DCP outlined the terms of a so-called Assurance of Voluntary Compliance with the company. An AVC is a legally binding agreement typically utilised in cases with allegations of consumer protection violations. Over a 25-month period through this March, the company violated two Connecticut statutes by illegally operating the unlicensed platform, according to the order.
During the period, 1,065 customers made at least $3.1 million in deposits, the DCP investigation found. While High 5 Casino informed the DCP in February that it planned to discontinue service statewide, state investigators determined that the platform remained operational through a simple geolocation switch.
The settlement is not considered an admission of liability or a violation of law for any purpose, according to the state. The company operated a dual-currency model with various mechanisms for awarding customers with coins for game use.
A sweepstakes site such as High 5 Casino will offer customers “virtual coins” free of charge. The coins differ from “virtual cash,” which is redeemable for real-money prizes. Across the gambling industry, a number of consumer protection advocacy groups have been critical of the model due to enticements that tempt customers to make deposits with sweepstake sites.
Earlier this month, Montana made history when it became the first US state to explicitly ban online sweepstakes casinos. Then, this week, a bill that seeks to prohibit unregulated online casino sweeps advanced in the Louisiana House of Representatives for a third reading.
Back in the Nutmeg State, the Connecticut Senate passed a version of a ban on 23 May by a unanimous 36-0 vote. The bill now heads to the House ahead of next week’s conclusion to the state legislative session.
Remedial measures
Of the $1.5 million settlement, High 5 Games agreed to pay $643,000 in restitution to consumers who lost money to High 5 Casino. The company will also pay nearly $800,000 in consumer complaint resolution programs, consumer education, consumer protection enforcement and litigation, according to the DCP.
“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 Cafferelli in a statement.
Among the remedial measures, High 5 Games agreed to block users physically located in Connecticut through its current level of geofencing. In addition, the company agreed to block users who attempt to use VPNs or proxies from accessing the High 5 Casino platform. In many cases, a user can employ a VPN to mask their physical location. The company also agreed not to reintroduce platforms with sweepstakes games unless it meets certain licensing standards.
Across the country, there is growing sentiment among legislators that the sweepstakes model provides a loophole for unlicensed operators to enter a market without facing regulatory and tax burdens. It is one of the major factors why the March order garnered national attention.
At the time, High 5 Games wrote in a statement that it planned to cooperate with Connecticut regulators to resolve the matter and maintain the integrity of its gaming licences.
High 5 Games CEO Tony Singer did not respond to a message from iGB seeking comment.