Fanatics Live, a streaming platform owned by Fanatics, has recently come under scrutiny as it bans spins and raffles while permitting random team breaks. This practice has drawn criticism from a whistleblower lawsuit in California, which labels these team breaks as unlicensed lotteries.
According to the platform's guidelines, Fanatics Live explicitly prohibits various forms of gambling, including spins, raffles, and third-party randomized results. However, it continues to allow random team breaks, a method where participants pay the same amount and are randomly assigned a team.
A whistleblower lawsuit filed under the California False Claims Act claims that both Fanatics Live and its competitor Whatnot are operating “unlicensed box-break lotteries.” As reported by ESPN, the lawsuit was unsealed in July and alleges that the companies have failed to pay necessary taxes and acquire required gambling and business licenses.
The lawsuit includes 18 plaintiffs from at least 11 states, who collectively spent amounts ranging from a few hundred dollars to over $4 million on breaks. The plaintiffs are seeking a court order to prevent Fanatics from supplying products to unlicensed breaking operations in California.
Despite the allegations, California’s Department of Justice has chosen not to intervene in the matter. Plaintiffs were given until August to decide on the next steps, but the case details remain unclear.
In a separate issue, four breaker businesses have filed a lawsuit against TikTok and Fanatics, claiming that TikTok banned their accounts for not exclusively selling Fanatics products. These lawsuits highlight the ongoing tensions within the card-breaking community and the implications of gambling regulations.