Zula and Sportzino Take Legal Action Against Two Law Firms Over Alleged Arbitration Fraud
The sweepstakes casinos Zula and Sportzino have filed a complaint against two New York-based law firms in the New York Supreme Court.
Sweepstakes casinos have faced a series of class action lawsuits recently. The suing parties allege that these sites operate illegally, as they are marketed as free to use but in reality require players to spend real money. However, Zula and Sportzino are fighting back.
Zula and Sportzino allege that the law firms Kind Law and Ben Travis Law planned to coerce the casinos into agreeing to vast settlements. If successful, Kind Law and Ben Travis Law would have been able to take a cut of each payout as payment for their services.
What Are the Grounds for Zula and Sportzino’s Complaint?
Kind Law and Ben Travis Law advertised on social media encouraging users of Zula and Sportzino to file claims against the casinos. These claims were then used in evidence against the casinos before the American Arbitration Association (AAA).
However, Zula and Sportzino have argued that many of the supposed customers were not even registered users, or were using the platform as social players rather than making purchases.
On both grounds, their testimony would subsequently be irrelevant to the lawsuit as they were not spending money.
The casinos also claim that many of their customers didn’t give Kind Law and Ben Travis Law permission to file lawsuits on their behalf. Zula and Sportzino also allege unethical behavior on the part of the law firms on the grounds that many registered users claimed to have been misled, in addition to the customers who claim they had no idea about the lawsuits being filed.
How Zula and Sportzino’s Investigations Led to Their Lawsuit
Zula and Sportzino were hit with mass arbitration demands of 667 and 229 cases respectively in August 2024.
However, 464 of these claimants had accepted terms and conditions that stated that disputes would be handled by ADR Chambers instead of the AAA. This meant they would not be eligible to be used as evidence in a case overseen by the AAA. A further 186 claimants were found to not even have a registered account at the relevant casinos.
Finally, Kind Law and Ben Travis Law voluntarily dismissed 209 claimants, as they admitted they had not received the correct authorization to file a case against Zula and Sportzino on their behalf.
Why Mass Arbitration is Becoming a Popular Tactic
Paying a lump sum settlement is often viewed as preferable to fighting large numbers of cases individually, as this could end up being significantly more costly.
However, some law firms are using mass arbitration to coerce big businesses into settling out of court for vast sums of money on fraudulent grounds.
