A lawsuit was filed on February 11, 2011 against 6 major penny auction websites- Swoopo.com, OohILove.com, BidCactus.com, Quibids.com, Beezid.com, and BigDeal.com. You can view the lawsuit document here in PDF.
According to the document, these penny auction websites are violating US gambling laws.
“This action alleges that Defendants operate illegal Internet gambling websites, by permitting persons to play games of chance for money and/or make a wager upon the result of a game or contest.”
Also quoted from the lawsuit document-
“Defendants conduct of charging consideration for the chance to win prizes (or something of value), violates all 50 state laws prohibiting unauthorized gambling.”
Currently, both Swoopo.com and OohILove.com (both owned and operated by Entertainment Shopping, INC) have shut down their websites. Although Swoopo claims it’s down due to technical issues. Swoopo also has another class action lawsuit filed against them in California, Hernandez v. Entertainment Shopping, Inc. The California lawsuit was filed March 21, 2011.

What do you think? Should penny auctions be considered illegal gambling?


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