Home / Play / VGW Reaches Settlement With New York to Avoid Further Penalties

VGW Reaches Settlement With New York to Avoid Further Penalties

Legal Writer

Publish Date: Sep 10, 2026

Fact checked by: Matt Moreno

Key Points

VGW will pay $8 million to New York but the settlement clears the company of any wrongdoing
New York law enforcement won't take any further action as long as VGW abides by the settlement terms
New York requires VGW to continue to only offer games without chances at real-money prizes in the state

Virtual Gaming Worlds has come to terms with New York Attorney General Letitia James in a way that will prevent any further enforcement actions against itself while enshrining the cessation of sweeps coin play that the company already deployed. Virtual Gaming Worlds will also pay $8 million to the state but in return avoids any formal allegations of violating New York law.

The settlement is significant because of Virtual Gaming World's position as a market share leader in the online sweepstakes casino industry and the amount of money that the company will pay to conclude the investigation. The agreement could set the tone for the company's legal matters in other states.

New York, VGW conclude dispute

The settlement is retroactively effective as of Aug. 31, 2026, but James and Virtual Gaming Worlds (VGW) have been building toward this result for more than a year. James sent a cease-and-desist letter to VGW in April 2025.

That correspondence informed the company that its sales of digital tokens in a dual-currency system coupled with the option to play online casino-style games for prizes with "sweeps coins" likely violate New York's gambling laws. Sweeps coins in this system are redeemable for real-money prizes once the user meets a playthrough requirement.

VGW restricted its games in New York in June 2025, removing the option to play with sweeps coins on its sites. The remaining digital currency, known as gold coins, are only viable for gameplay on the sites with no real-money value.

Playing games like baccarat, blackjack, craps, roulette, and slots online for real money remains illegal in New York. New York enshrined a law this year that stresses that doing so as part of an online sweepstakes also represents illegal gambling.

AB 831 signed into law, banning online sweepstakes casinos for operating in California

Settlement consents to gold coin play in New York

The settlement terms require VGW to continue with its abstention from offering New Yorkers sweeps coin play on its sites like Chumba Casino and LuckyLand Casino. The terms give VGW clearance to welcome people in New York the opportunity to purchase gold coins and play games on those sites with that currency, though.

New Yorkers who had redeemable sweeps coins in their accounts on any of VGW's sites as of June 2, 2025, and have not received notifications from VGW as to the status of those tokens will have until Aug. 31, 2027 to redeem those tokens. Any balances past that date in New York will become forfeit.

This settlement could be said to be the first enforcement of New York's sweepstakes casino ban, although the terms explicitly state that VGW does not admit to any wrongdoing. VGW can divert its attention to other legal matters with this settlement in place.

New York settlement might foreshadow other deals

VGW is a defendant in lawsuits in Florida and Kentucky state courts at this time. The complaint that Florida Attorney General James Uthmeier brought in August seeks an injunction against VGW operating in the state on any level.

Kentucky Attorney General Russell Coleman, meanwhile, targets sweeps coin play and seeks fines for VGW in his complaint. Settlements could end both actions as they are civil lawsuits and neither state has filed any criminal charges against VGW or its officers to date.

If those settlements resemble the New York deal, it could further signal the end of sweeps coins play on sweepstakes casinos in the US. Until then, the New York settlement is still a significant signal that state governments can regulate online gaming effectively if they choose to deploy the necessary resources.

Ready to continue reading about sweepstakes casinos? Look no further than our Ballislife Play page.

Play

Kalshi Says New CFTC Regulation Prompts Review of Sixth Circuit Injunction Decision

Kalshi is continuing its lawsuit against gambling regulators and law enforcement in Ohio and Tennessee. The prediction market exchange operator has asked the US Sixth Circuit Court of Appeals to review a panel decision concerning those cases. Kalshi referred to a recently published rule for designated contract markets in its ...

by Derek Helling

9 hours ago