Fliff’s response to a class action lawsuit against the free-to-play sports prediction site might as well have said, “Read the fine print.” On Aug. 2, a California judge agreed with Fliff’s attorneys that plaintiff Bishoy Nessim had consented to Fliff’s Terms of Use and Sweepstakes Rules when he signed up for an account. Therefore, Nessim has 30 days to explain to the court why the case belongs in federal court rather than being arbitrated individually.
So last week, Judge Sunshine S. Sykes of the US District Court, Central District of California issued a proposed order dismissing the class action filed on June 6. She’ll make the permanent order in 30 days, if Nessim doesn’t make a compelling argument against it.
Federal courts note that entering arbitration doesn’t negate a future lawsuit.
So this case challenging the sweepstakes social gaming model may not be dead. That’s welcome news to legal online casino advocates because there’s still no precedent regarding such sites. So far, plaintiffs have settled lawsuits before they reach the opinion stage.
However, a decision in Nessim vs. Fliff may not provide the precedent sought by social casino opponents.
That’s because the primary difference between Fliff and social gaming sites like Chumba and Pulsz is that Fliff users plop virtual cash on sporting events, while the latter add virtual money to slots and other casino-like games.
Fliff Writes Memo About Its ‘Motion to Compel Arbitration’
On June 6, Nessim and others filed a class action lawsuit against Fliff. The plaintiff claimed in Nessim vs. Fliff that Fliff was allegedly an illegal sportsbook.
Online sports betting isn’t yet legal in California. Voters soundly rejected legalizing sportsbooks in November 2022.
So Nessim’s complaint alleged Fliff’s free-to-play sports prediction site definition was a disingenuous way to get around California law.
Nessim’s filing on June 6 said:
To avoid any regulation or legal oversight, Fliff claims to be a free sweepstakes with the chance for users to “play sports prediction games for entertainment.” But, in the real world, alleged sports prediction games are nothing more than online sports gambling. Indeed, Fliff gives every user, regardless of local, state, or federal law, the option to bet with “Fliff Cash” which has a dollar-for-dollar equivalence to actual money and that can be withdrawn and wired directly to the users’ bank accounts. That’s the epitome of an online sportsbook.
However, a legal decision about this social gaming site may need to wait.
Fliff’s Aug. 2 memo supporting its Motion to Compel Arbitration says:
When Nessim registered to use Fliff’s services, he agreed to Terms of Use and Sweepstakes Rules requiring “any and all disputes and causes of action arising out of or connected with” those services to be arbitrated. Both of Nessim’s claims concern his alleged purchase and use of Fliff Cash in sweepstakes games on the Fliff application, and thus they fall well within the scope of claims that the parties expressly agreed must be arbitrated. Nessim conspicuously avoids referencing this mandatory arbitration provision (or indeed, any of Fliff’s Terms of Use or Sweepstakes Rules) in the Complaint for good reason – it operates as a total bar to the claims he attempts to assert in this Court.
Meanwhile, Fliff’s screengrabs on Google Play and the App Store proclaim it “The #1 Social Sportsbook.” With more than 50,000 downloads on Google Play and a “No. 76 in Sports” ranking in the App Store, quite a few Fliff users have agreed to those terms of service.
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