Key Moments:
- In August 2025, a California judge rejected High 5 Entertainment’s attempt to enforce arbitration, calling the agreement “unconscionable.”
- High 5 Entertainment has faced similar lawsuits in Washington and Connecticut, leading to its withdrawal from those states.
- Assembly Bill 831 in California proposes a ban on sweepstakes casinos, signaling possible future regulatory shifts for the industry.
Legal Setback for High 5 Entertainment in California
A California court has delivered a significant blow to High 5 Entertainment, a prominent sweepstakes casino operator, by denying four motions aimed at dismissing legal claims against the company. Among these was an effort to compel arbitration, which the judge described as “unconscionable.” This development intensifies scrutiny of sweepstakes casinos as legal challenges mount in the United States.
Details of the Case and Allegations
Thomas Portugal initiated a lawsuit against High 5 Entertainment in January, claiming the company misled him into purchasing access to an illegal gaming service. His complaint accuses the firm of deceptive advertising, imposing unfair contract terms, and running operations without the appropriate gambling license. Portugal also argued that High 5’s sweepstakes model violated consumer protection laws.
High 5 Entertainment is no stranger to such disputes. The company previously faced and settled lawsuits in both Washington and Connecticut, which ultimately led to its withdrawal from those markets.
News: Sweepstakes casino operator High 5 Entertainment (d/b/a High 5 Games) loses another key battle in San Francisco Superior Court, as judge denies its motion to compel arbitration, finding that the mandatory arbitration provision is unconscionable. pic.twitter.com/uCRwpcqIDW
— Daniel Wallach (@WALLACHLEGAL) September 2, 2025
Judge’s Ruling and Its Effects
Judge Anne-Christine Massullo ruled in August 2025 that High 5 Entertainment could not enforce arbitration in this matter, determining that the clause heavily disadvantaged players while favoring the operator. The agreement set a one-year limitation for initiating claims, made players responsible for their own legal expenses even when successful, and curtailed the opportunity for users to seek public injunctions without first pursuing financial remedies.
By moving the dispute into open court, High 5 must now defend itself in a public setting, exposing its practices to broader examination. The plaintiff’s counsel contended that the disagreement fell outside the arbitration agreement, the contract was unconscionable, and the terms illegitimate. The judge agreed with the first two assertions, but stopped short of voiding the entire contract on grounds of illegality.
Industry and Regulatory Implications
Many sweepstakes casino operators use similar Terms of Service, including arbitration clauses comparable to those under review in this case. The outcome of this lawsuit may carry significant ramifications for other businesses using the same approach. Courts have been increasingly prioritizing consumer rights over restrictive agreements, a trend echoed by active lawsuits against operators in additional markets such as Florida and New Jersey.
California legislators are considering Assembly Bill 831, which aims to ban sweepstakes casinos. Growing concerns over misleading marketing and pressuring users to spend have shaped public perception and could influence regulatory decisions. Should the bill pass, California would be added to the growing list of states prohibiting these types of business models.
High 5 Entertainment’s Withdrawals and Policy Changes
Due to regulatory developments and previous court actions, High 5 Entertainment has exited both Washington and Connecticut. Earlier this year, the company discontinued the creation of new accounts in Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, and West Virginia, updating its Terms and Conditions accordingly.
| State | High 5 Entertainment Status |
|---|---|
| Washington | Exited |
| Connecticut | Exited; new accounts unavailable |
| Delaware | New accounts unavailable |
| New Jersey | New accounts unavailable |
| Pennsylvania | New accounts unavailable |
| Rhode Island | New accounts unavailable |
| West Virginia | New accounts unavailable |
Looking Ahead
Sweepstakes casino operators may soon overhaul their Terms of Service to address growing legal risks and regulatory focus. As multiple lawsuits progress, rulings in the coming 12 to 18 months have the potential to redefine compliance requirements and reshape the landscape for businesses targeting the sweepstakes gaming sector.
- Author
Daniel Williams
