How Sweeps Operators Fix Potential T&Cs Flaw Exposed By US Supreme Court

The year 2024 marked a crescendo for sweepstakes promotions and sweepstakes casinos, so much so that the U.S. Supreme Court decided a case that will directly impact the way that certain platforms operate, going forward — in the fine print at least.

In May, the country’s highest court heard Coinbase, Inc. v. Suski, a case that has had and will have lasting implications on how sweepstakes operators craft their terms and conditions and their promotional terms — and how the two interact with each other.

Coinbase, a digital currency exchange platform, ran a sweepstakes promotion where patrons could enter for a chance to win free Dogecoin, a type of cryptocurrency. (And because this is the year 2025, it is also the namesake of a pseudo-governmental agency.) When those customers originally signed up for Coinbase, they approved the platform’s user agreement, one that resembles a sweepstakes casino’s terms and conditions.

That user agreement contained an arbitration clause. The clause stipulated that, if any legal conflict arose between a customer and Coinbase, it would be resolved via arbitration. Arbitration happens outside a courtroom, often in private settings, where a third-party hears both sides of a case and then issues a ruling.

However, in the official rules for the Dogecoin promotion, Coinbase stated that, should a legal dispute arise, California courts would have jurisdiction. That disconnect between the two agreements gave rise to the lawsuit. Which clause takes precedence, and who would oversee the dispute?

Customers sued Coinbase in California court, claiming the sweepstakes promotion violated state laws. Coinbase argued the case should be resolved in arbitration, due to the clause in the user agreement.

The case made it all the way to the U.S. Supreme Court, which ruled that in cases such as the one at issue, a court, not an arbitrator, must decide whether the parties’ first agreement (the user agreement) was superseded by the second (the sweepstakes terms and conditions with an arbitration agreement):

the Court does not believe its ruling here will invite chaos by facilitating challenges to delegation clauses. Regardless, where the parties have agreed to two contracts, a court must decide which contract governs. To hold otherwise would be to impermissibly elevate a delegation provision over other forms of contract.

How ruling impacts sweeps sites

Sweepstakes gaming sites include arbitration clauses in their terms and conditions, just like Coinbase. And so operators will need to take a fine-tooth comb through all their terms and rules and make sure everything is consistent, especially when subsequent promotions with separate terms are introduced.

“The Official Rules supersede your User Agreement — meaning that any inconsistent language in the Official Rules will control,” Robert Laplaca, a partner at the law firm Verrill, wrote in a blog post advising sweepstakes companies after Coinbase, Inc. v. Suski. “Therefore, check your User Agreement when drafting Official Rules. And either be consistent or understand that you may be changing the terms of the User Agreement by having inconsistent provisions in your Official Rules.”

And now, since Coinbase, Inc. v. Suski, you can be sure that sweepstakes operators (at least the ones paying attention) include language in their promo rules that protect them from the mess Coinbase found itself in last year.

For example, in the terms and conditions for its promos, which players will access after they approve the initial T&Cs to register, High 5 Casino explicitly states:

“General T&Cs apply.”

On McLuck, you’ll see this line included in all its promo rules:

“This offer is subject to the Terms of Service and Sweepstakes rules.”

Crown Coins Casino, Stake.us, Mega Bonanza, Funzpoints, and Fortune Coins are also clear in their promo rules, with all saying in some way, “Hey, remember those T&Cs you approved when you signed up? Those apply here, too.”

Meanwhile, operators such as Real Prize, Jackpota, Hello Millions, and Chanced may be leaving more up to chance. None mention anything about any type of terms applying in their promo rules.

Arbitration is vital for sweeps operators

Operators know legal disputes will arise — that’s not unique to this industry. And when they do, sweepstakes casinos don’t want to go to court. Arbitration is less protracted, less public, and less expensive. High 5 Casino’s terms and conditions explicitly state arbitration results must be kept confidential, for instance.

Meanwhile, the arbitration clauses are proving effective, as in the case of Fliff in California, where a California court compelled arbitration:

Many of the lawsuits brought against sweepstakes operators have focused on arbitration clauses in the terms and conditions — whether the lawsuits should even be tried publicly in court — and not on the actual legality of the underlying platform models utilizing a controversial dual currency system.

“From arbitration clauses to jurisdictional defenses, there are procedural challenges every step of the way (in sweepstakes lawsuits),” wrote Daniel Wallach, a U.S. gaming attorney, on LinkedIn after a Georgia court dismissed a VGW Holdings lawsuit, which featured the kind of arbitration back-and-forth described above.

Yet the Supreme Court’s ruling in Coinbase, Inc. v. Suski showed sweepstakes operators a potential vulnerability in the arbitration agreements. They need to be precise, specific, and careful with any rules that players approve after they sign off on the initial terms and conditions.

Otherwise, a complainant’s “day in court” may occur in an actual court of law after all.