The owner of Pulsz and Pulsz Bingo has agreed to pay $1.32 million to settle a class action lawsuit in Kentucky, which alleged that those sites constituted illegal gambling. State residents wishing to claim a portion of the settlement must complete a claim form before Jan. 29, 2024.
Yellow Social Interactive (YSI) is one of two social casino companies that agreed to such settlements last week. Like its counterpart, Woopla, YSI denied any wrongdoing but promised to make changes to its games as part of the settlement. Last year, a third company, Virtual Gaming Worlds (VGW), agreed to a significantly larger settlement of $11.75 million. Taken together, the three suits amount to $14 million being returned to Kentucky residents.
The Kentucky lawsuit is separate from the arbitration proceedings YSI faces in other jurisdictions. Like many social casinos, YSI now includes a class action waiver in its terms & conditions, compelling users to seek individual compensation through arbitration rather than collectively in the courts.
Pulsz and Pulsz Bingo are social gaming sites using a sweepstakes model to offer the chance to win cash. Players purchase play money chips with no cash value. In doing so, they receive free sweepstakes tokens as a promotional bonus. Playing games using the latter offers an opportunity to win more, which can later be exchanged for prizes.
None of these lawsuits targeted the sweepstakes offer, however. Instead, they argued that these social casinos constituted illegal gambling because users could not continue playing if they ran out of chips. That, by the plaintiffs’ reasoning, made the chips a “thing of value” and the games a gambling product. Courts have not ruled on the validity of that argument, as every such suit has ended in a settlement.
Who’s Eligible for Part of the Pulsz Settlement?
The Pulsz settlement applies only to players in the State of Kentucky. To be eligible, a player must have spent at least $5 on Pulsz or Pulsz Bingo while located in Kentucky during the applicable period. The date range differs for the two sites:
- Pulsz: Between Oct. 2, 2020 and Nov. 3, 2022
- Pulsz Bingo: Between July 20, 2022 and Feb. 9, 2023
Eligible players wishing to receive a portion of the settlement fund must fill out a claim form on the Pulsz Platform Settlement Site. Note that you should only fill out the form if you are legitimately eligible. Filing a false claim is an act of perjury and could result in legal consequences.
The deadline to file a claim is Jan. 29, 2024. Those who fail to act by then will forfeit their right to compensation unless they’ve objected or opted out of the class in the meantime. The deadline to exercise those options is this week: Nov. 17, 2023. Those who opt out won’t be eligible for part of the settlement but reserve their right to pursue individual compensation later.
How Much Will Pulsz Users Get From the KY Settlement?
The $1.32 million paid by YSI will be split between the members of the class, except for a portion that will be withheld for attorney’s fees, the administration of the settlement fund, and an incentive payment to the lead plaintiff. These expenses won’t exceed one-third of the total.
How much each will receive depends on how many people apply and how much each of them spent on the sites.
The settlement website provides a calculator to estimate your potential payout. It starts with a base payment amount calculated as follows:
- 10% of the first $1,000 in spending by the player
- 17.5% of any additional spending up to $10,000
- 30% of any further spending up to $100,000
- 60% of any spending above $100,000
For instance, the base amount for a player who spent $3,000 would be: $100 (10%) for the first $1,000, plus $350 (17.5%) for the next $2,000, for a total of $450.
However, the payments will be adjusted depending on the number of applicants. Furthermore, the administration fees, attorneys’ payments, etc., come from each claimant’s payout.
Experimenting with the calculator suggests that the fund administrators expect the real payouts to be about three-quarters of the base amount. So, if you spent $100 and your base amount is $10, you might only get $7.50 back.
Payments will go out within 90 days of the settlement being finalized. However, finalizing it will take some time. In the case of the VGW suit, that step took place three months after the claim deadline, meaning a six-month total wait time. Assuming a similar timeline here, eligible Pulsz customers might expect their payouts sometime in summer 2024, perhaps around the beginning of July.
What Changes Did Pulsz Agree To?
Although none of the three companies—Pulsz, Woopla, or VGW—admitted any wrongdoing, all three agreed to modify their products in response to the complaints in their respective lawsuits.
Firstly, YSI has agreed to modify Pulsz and Pulsz Bingo to allow users to continue playing even when they’ve run out of chips “without waiting an unreasonable amount of time.”
Secondly, it will implement responsible gaming features similar to those required by regulators of real-money gaming products. For instance, providing users with resources to address their video gaming habits and an option for self-exclusion for those finding self-control too difficult.
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