Sportsbetting App Fliff Faces $5M Class Action Lawsuit

A Californian, Bishoy Neshim, has initiated a class action lawsuit against Fliff Inc., claiming the popular free-to-play sports betting application is operating illegally in California. The lawsuit alleges violations of the Wire Act, the California Unfair Competition Law, and anti-bookmaking statutes.

Neshim claims to have lost over $7,000 while using the app, and he is seeking more than $5 million in damages for himself and similarly affected users. The complaint highlights that Fliff employs a business model termed a “lure” designed to entice players with free options (referred to as “Fliff Coins”) before transitioning them to real cash gameplay (termed “Fliff Cash”) that can be cashed out directly to their bank accounts, likening it to the practices of a traditional sportsbook.

The filed complaint also seeks an injunction to prohibit Fliff from offering its contests across state lines, alleging violations of the federal Wire Act.

Fliff’s Business Model

Fliff operates as a social sportsbook allowing users to engage in gameplay without using real money by making picks on their favourite players and teams. Users earn virtual coins, with opportunities to win cash prizes. For practical purposes, Fliff functions under the sweepstakes model, and is available to users in 49 states.

California Sports Betting Landscape

It’s noteworthy that California voters rejected a proposition to legalise sports betting in November 2022, which adds complexity to Fliff’s position in the state.

Fliff’s Struggles Beyond California

The scrutiny of Fliff isn’t limited to California. The app is currently under the microscope in several states, including Ohio, where the Ohio Casino Control Commission has placed other free-to-play applications like Lucra Sports and Prediction Strike under investigation as well.

As Fliff’s operations are under review, many key players in these states are now pondering the future of free-to-play gaming versus traditional sports betting.

The Wider Implications

This class action suit could set a significant precedent affecting not just Fliff but also other sweepstakes model casinos. As the industry evolves rapidly, the legal ramifications of this lawsuit may encourage similar cases to emerge against other platforms operating under comparable models.

What’s Next?

The lawsuit is ongoing, with the plaintiff seeking a jury trial, although legal experts suggest that settlements are more common in such cases, especially if they are not dismissed early in the proceedings.

Fliff is notably required to respond to the lawsuit by June 28, which will be a pivotal date for the company as it navigates this legal challenge.

Summary

The lawsuit against Fliff Inc. underscores the ongoing tensions in the sports betting industry, particularly concerning the legality of free-to-play models. With rising scrutiny from regulators and legal challenges, Fliff’s operations and strategic direction could face significant headwinds in the months to come.