Attorneys representing Bishoy Nessim, who is suing Fliff, argued that claims by the social media game company that its terms and conditions apply are not valid. The court will hold a hearing on the motion on September 29.
Fliff is facing a class-action lawsuit in California. The lawsuit alleges that Fliff, a social, free-to-play game that operates in 42 states, is actually operating as an illegal online sportsbook.
This violation is claimed to be in direct contradiction to the federal Wire Act, California’s Unfair Competition Law and anti-bookmaking laws. Fliff’s legal team, however, argues that disputes related to the app must be resolved through arbitration, as stated in their terms of service and sweepstakes rules.
Fliff, a popular sweepstakes app, has gained traction in states like California where online betting is not allowed. The app offers users the opportunity to claim Fliff Coins for free or purchase them, which can then be used in social gameplay to earn experience and redeem gift cards.
Additionally, Fliff Cash can be used to make sports predictions and, upon successful predictions, redeemed for real money. The lawsuit argues that these sports prediction games are, in fact, online sports betting, which is illegal in California. Nessim claims to have lost $7,000 on Fliff and seeks more than $5 million in damages for himself and all Californians who lost money on the app.
Fliff’s legal team has filed a motion to dismiss the class-action lawsuit and compel the matter to arbitration on an individual basis. Their argument is that all participants in the sweepstakes agreed to resolve any disputes through arbitration, explicitly waiving their rights to class-action lawsuits. However, the enforceability of this arbitration agreement is a key determination for Judge Sunshine Suzanne Sykes. While there is a strong presumption against class arbitration unless explicitly authorized, plaintiffs often argue that no valid agreement to arbitrate was formed in these cases.
The plaintiff’s response to the motion to compel arbitration is expected to focus on the legality of the arbitration agreement itself. The argument is that the agreement is void as a matter of law because it seeks to legitimize an illegal gambling transaction. Contracts engaging in illegal activities, such as illegal gambling, are generally considered void and unenforceable. Previous cases have seen courts decline to enforce arbitration provisions in gambling contracts due to the illegal subject matter. This argument will likely play a significant role in the court’s decision.
The Fliff lawsuit highlights the ongoing battle over the legality of sweepstakes and online gaming. While Fliff operates as a social, free-to-play game, the allegations against it suggest that it is running an illegal online sportsbook. The motion to compel arbitration sets the stage for a crucial determination by the court on the enforceability of the arbitration agreement.
