Sweepstakes in the crosshairs as Blazesoft faces class action and states circle
What looks like a harmless sweepstakes casino may be anything but. In New York, that illusion is now under fire.
Online sweepstakes operator Blazesoft, known for its Fortune Coins, Zula Casino and Sportzino platforms, is at the centre of a class action lawsuit. The case, filed in the Southern District of New York, accuses the Ontario-based company of running an illegal gambling scheme disguised as a free-to-play sweepstakes experience.
Lawsuit claims sweepstakes are a thinly veiled casino
Autumn Boatner, a New York resident, says she lost over $50 on Blazesoft games marketed as free and legal. Her legal team argues that the dual-currency model, Gold Coins for gameplay and Sweeps Coins redeemable for cash, is a cover for real-money wagering.
In the class action complaint filed in the Southern District of New York, Boatner’s legal team calls the system “a predatory trap.” The document alleges that Blazesoft lures players to spend on Gold Coin bundles, which include Sweeps Coins as “bonuses.” These bonuses are the only path to real-world money. According to the legal filing, that makes it gambling in all but name.
In the class action filing, Boatner’s legal team also described the redemption criteria as “intentionally opaque,” arguing that the cash-out thresholds are designed to confuse players and delay withdrawals.
Worse, the complaint says underage users can access the games. While New York law sets 21 as the legal gambling age, Blazesoft allows users over 18 to play.
The company claims it operates out of Canada, but its casino brands list Delaware business addresses. The lawsuit describes these as “sham companies” with no employees or physical presence.
A past that keeps repeating
This isn’t the first time U.S. regulators have faced this model. In the mid-2000s, internet sweepstakes cafés spread across U.S. strip malls. These businesses offered internet access, and with it, sweepstakes entries that looked suspiciously like slot machines.
They used the same laws that power promotional campaigns like McDonald’s Monopoly. But unlike those contests, the cafés were open 24/7 and relied on simulated gameplay to drive real money spending.
Sound familiar?
States like Ohio and California eventually banned the cafés outright. The American Gaming Association (AGA) now draws a direct line between those cafés and today’s sweepstakes websites.
“In many ways, this is no different,” said Tres York, vice president of state government relations at the AGA. “The business model is the same. One used storefronts. The other uses websites.”
Legal pressure is mounting across the country
Blazesoft is not alone. The sweepstakes model is under siege from multiple angles.
Stake.US faces a class action in Illinois for using a similar dual-currency system. The lawsuit alleges that the company, backed by celebrity endorsements, blurs the line between gambling and social gaming. The same law firm also filed a case in California and won a $25 million judgment in Washington against High 5 Games.
Meanwhile, a refiled suit in New Jersey takes aim at tech giants. Plaintiffs claim Apple and Google enabled illegal sweepstakes gambling by distributing apps like Chumba Casino and Luckyland. The lawsuit invokes the RICO Act, which is usually reserved for organised crime. It claims the platforms profited from processing and promoting illegal games.
In North Carolina, an appellate court ruled that kiosks offering sweepstakes-style video games broke state law. The key issue? Winning was based on chance, not skill.
State lawmakers draw a line in the sand
States aren’t waiting for federal direction. In 2025, New York introduced two bills to ban online sweepstakes casinos outright. The proposed laws, S5935 and A6745, would apply to operators, suppliers, affiliates, and payment processors. “These sites operate 24/7. That’s not a promotion; that’s a casino,” Senator Joseph Addabbo Jr. said in comments to . He added that many of these platforms use “very colourful games accessible to minors.” Fines could reach $100,000 per violation. Enforcement would fall to gaming regulators, police, and the Attorney General.
Other states are following suit. Connecticut has banned sweepstakes casinos. California, Pennsylvania, and Massachusetts have also pursued enforcement actions. But not all efforts succeed. Maryland’s attempt to outlaw the model failed in its 2025 session.
The industry fights back
The Social and Promotional Games Association (SPGA) argues that new laws overreach. They warn of unintended harm to genuine promotions.
“When legislation threatens everyday perks from airlines, hotels, and your local coffee shop, it’s dangerously out of touch,” a spokesperson said.
However, critics argue that real sweepstakes are limited-time, free-entry contests. Online sweepstakes casinos operate year-round and require purchase to play. Regulators have dismissed the claim that Sweeps Coins are truly “free.” As Tres York told Vixio Gambling Compliance, “not a single regulator has bought the argument.”
The risk of ignoring enforcement
For operators, the consequences are no longer hypothetical. Legal and regulatory risks are piling up.
States can impose steep fines – some over $1,000 per offence. In New York, violations under proposed laws could hit six figures.
Criminal charges are on the table, too. In Florida, operators face misdemeanours. In Connecticut, they could face a year in jail per count. Authorities can issue cease-and-desist orders, suspend licences, or revoke gaming approvals. In one case, Connecticut pulled a service licence because of sweepstakes activity.
Operators also risk civil lawsuits and class actions. Blazesoft now faces exactly that – with a growing plaintiff base in New York. Payment processors and affiliates could be next. Financial institutions are wary. WorldPay was previously named in litigation. Legal exposure may cause banks and processors to exit the space entirely.
Finally, there’s reputational fallout. A state ban can trigger market exit and permanent damage. If federal agencies step in under laws like the Travel Act, consequences escalate.
Will the bubble burst?
Blazesoft’s silence speaks volumes. While the company boasts 4 million users across North America, its legal position is under siege.
Across the U.S., a regulatory wave is rising. From statehouses to courthouses, the message is simple: dual-currency sweepstakes models may no longer skate by.
2025 is where the gloves come off. Regulators have stopped asking questions and started drawing lines. They are no longer asking whether these platforms break the rules. They’re asking how long it will take to shut them down.
Sweepstakes casinos promise players a free ride, but they may be headed straight to a legal dead end.
