The operator of sports prediction games for entertainment, Fliff, is facing a class action lawsuit in California after a complaint seeking $5 million in damages was filed with the US District Court for the Central District of California on June 6.
Seeking Compensation for the Losses
The plaintiff, Bishoy Neshim, claims he lost over $7,000 while using the Fliff app and filed a complaint alleging Fliff is operating as a sportsbook. Neshim seeks compensation for his losses and for the losses of those similarly affected by Fliff’s alleged illegal sports betting operation. The lawsuit also seeks an injunction to stop Fliff from violating the federal Wire Act by offering its contests across state lines.
Sportsbooks are not permitted in California after voters decided against the legalization of sports wagering in November 2022, defeating the proposition that would have allowed for retail sports betting at tribal casinos and horse racing tracks, as well as the proposition that would have opened the state to mobile and online wagering.
The lawsuit states that “Fliff facilitates the ability for California residents to make online sports wagers to win real money without any approvals, regulations, oversight, or taxing,” claiming “to be a free-to-play operator of sweepstakes with the chance to play ‘sports prediction games’ for entertainment” while “in the real world, alleged sports prediction games are nothing more than online sports gambling.”
The lawsuit further elaborates on the model utilized by Fliff through which the operator uses a medium, “Fliff cash,” to replace real money but in practice, Fliff cash “has a dollar-for-dollar equivalence to actual money and that can be withdrawn and wired directly to the users’ bank account.”
The plaintiff states that Fliff does not satisfy the state’s definition of “sweepstakes” as its prizes are not distributed either by lot or by chance, and instead uses the sweepstakes model to entice customers with free “Fliff Coins” and then bait them into depositing US dollars and converting them into Fliff cash.
Regulatory Probe in Ohio
Based in Pennsylvania and with a development hub in Bulgaria, the operator that is currently available in 45 US states was one of five operators which fell under regulatory scrutiny in Ohio, following an investigation launched by the Ohio Casino Control Commission (OCCC) in May.
The OCCC addressed issues that these sweepstakes operators offer markets that mimic traditional prop-type bets, while player wins and losses are dependent on their point totals resembling a spread.
Following the complaint in California, the court is expected to hear arguments from both the plaintiff and defendant in the coming weeks and months. If the court finds Fliff guilty of unlawful bookmaking and wagering under Californian law, the operator will face a felony charge.