Whatnot Faces Accusations of Facilitating Illegal Gambling via Card Breaks

(AsiaGameHub) –   California lawsuits are applying new pressure to Whatnot regarding how sports card breaks are sold on its platform. Plaintiffs argue the format amounts to illegal gambling, but the company disputes this and states gambling is prohibited on the site.

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Good to Know

• The cases encompass 15 arbitration claims with 30 plaintiffs.
• Plaintiffs assert that random card breaks and repacks violate California gaming laws.
• Whatnot stated it denies the claims and prohibits gambling on its platform.

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California Lawsuits Target the Random Aspect of Whatnot’s Card Sales

A California legal battle now centers on one of the most popular elements of the modern sports card market. Instead of targeting standard card sales, the lawsuits zero in on live breaks and repacks—where buyers pay before learning which cards they’ll receive.

That difference is significant. Plaintiffs aren’t challenging direct card purchases where the item is known in advance. Instead, they’re targeting the random format tied to unopened boxes and repack products. In these breaks, customers pay first, then a streamer opens the product live, and the final value can fluctuate drastically based on what’s inside.

The lawsuits claim this setup resembles a lottery more than retail. Buyers pay for a shot at something valuable, with outcomes unknown until the pack is opened during the stream. Plaintiffs contend this structure violates state rules against illegal lotteries.

Whatnot is a key player in the industry. The platform reported over $8 billion in sales in 2025 and moves more than six million trading cards monthly. That scale is one reason the case could have implications far beyond a single company—if plaintiffs win, it could reshape how live card breaks operate across the broader hobby.

The complaints sharply criticize the platform’s self-representation. “Whatnot claims to run a ‘marketplace’ where live shopping connects ‘buyers’ and ‘sellers.’ This is a facade,” the case’s plaintiffs told The Athletic.

The filing goes further: “In practice, Whatnot runs an unregulated online casino that preys on its customers by encouraging compulsive spending—generating billions in revenue without the protections mandatory for regulated gambling operations.”

Allegations of Addiction

That argument is supported by addiction claims from those involved in the cases. Attorney Paul Lesko told The Athletic that several clients were drawn in by the randomness and the thrill of the bidding and reveal process. “Our clients quickly became addicted to it,” he said. “… At some point, they even stop caring about the cards. It’s just the dopamine rush from bidding and winning an auction to secure a spot for the chance to get a team they want.”

Repacks are also at the heart of the dispute. Unlike factory-sealed products, repacks are assembled by operators from cards they’ve already collected, then resold for break-style reveals. Critics say this adds another layer of concern because the product exists mainly for randomized resale.

Plaintiffs are seeking multiple remedies: restitution, warnings for future breaks, spending limits, punitive damages, and a court ruling that the disputed activity is unlawful.

Whatnot is pushing back. The company denied operating illegal gambling through its platform. In a statement to The Athletic, it said: “We completely reject the characterization in this complaint.” The company added: “Gambling isn’t allowed on Whatnot, and we enforce this policy rigorously.”