Row over sweepstakes gets to California with first class-action lawsuit

California is now officially going to trial its first class-action lawsuit against a sweepstakes operator. Yellow Social Interactive Ltd, the company which operates Pulsz dot com has been hit with a complaint in The Golden State.

This is the first such action brought by a party against a sweepstakes business in California, and it broadly aligns with similar cases that have been launched in other states, at a time when the entire model has come under increased scrutiny in the United States.

Lawsuit goes after Pulsz dot com, argues it’s an illegal gambling business

A fellow operator, VGW has been on the receiving end of increased attention by state regulators and in private complaints recently, with the company ordered to withdraw from Connecticut and still facing a private lawsuit after its acquiescence to comply with the request.

Meanwhile, the complaint in California is filed on behalf of plaintiff Dennis Boyle in OrangeCounty Superior Court and with the help of class-action specialist Smith Krivoshey, targeting the company what it alleges to be illegal gambling and violation of California’s unfair competition and consumer protection laws.

In his complaint, Boyle calls for the shutdown of Pulsz dot com, and calls it an "offshore criminal enterprise." The plaintiff further alleges that the website purposefully avoids mentioning the word "gambling" anywhere in its description despite the fact, insists the plaintiff, that the website is clearly a gambling operation.

The complaint further accuses Pulsz of "gaslighting" players by using language that does not accurately describe its model. The issue is with the wording of the products as "social gaming" and sweepstakes" when in reality, the options available at Pulsz, argue the complaint is more akin to gambling, and poses a threat to vulnerable consumers.

To drive this point in, the complaint mentions the fact that Pulsz is aware of what its actual business model is by featuring a "Computer Game Behavior Disorder" page, in which it warns users to watch out for certain symptoms that could suggest addiction.

Pulsz seeks to incentivize players to stick around, offering "harmful advice"

Despite this, the complaint also says that the company has done "nothing" to stop players from continuing to play, and even offered "harmful advice."

"Worse, to dissuade users from discontinuing their gambling, Defendant also offers harmful advice suggesting that website users should not seek help unless their symptoms have 'sufficient severity' and have 'been evident for at least 12 months," the plaintiff further alleges.

The lawsuit seeks for the company to cease operations but also disgorge any funds that it may have generated by doing business in this manner, which the plaintiff insists is illegal.