Key Points
- Two legal claims allege live card "breaking" is illegal gambling.
- Paul Lesko's arbitration demand represents about 70 Whatnot customers.
- A July 2025 California lawsuit names Whatnot and Fanatics Live.
- Lesko's clients reportedly spent more than $252 million on Whatnot.
Opening a box of cards on a livestream is either a hobby or a casino, and two legal claims now argue it is the casino. The fight puts the practice of "breaking," and the live-shopping platforms built on it, under regulatory scrutiny.
In a break, a seller opens sealed boxes of sports cards or memorabilia on a livestream while buyers own "slots" entitling them to part of the haul. A New York Yankees slot costs more than an Athletics one; some breaks are fully randomized, with buyers paying a flat rate for a random team. The claims argue that the randomized version is an unregulated game of chance — effectively a lottery.
This spring, attorney Paul Lesko filed an arbitration demand against Whatnot on behalf of roughly 70 customers; he told ESPN the process should begin by mid-July. A separate qui tam lawsuit, filed in July 2025 under California's False Claims Act and recently unsealed, names both Whatnot and Fanatics Live, with 18 plaintiffs across 11-plus states and individual spending from hundreds of dollars to more than $4 million. The claims invoke the RICO Act, California's ban on illegal lotteries, and the state's specific prohibition on sports trading-card "grab bag" lotteries, calling Whatnot an "unregulated online casino."
Why the stakes are real
The money is not small. Lesko says his clients alone spent more than $252 million on Whatnot, and breakers make up about 4% of the platform's sellers. Plaintiffs want the breaks declared illegal gambling and are seeking restitution, damages, and orders forcing spending limits, self-exclusion tools, and an end to randomized breaks. Whatnot rejects it flatly: "Gambling isn't allowed on Whatnot, and we strictly enforce this policy," the company said, calling card breaks "a long-standing format in collecting ... at card shops, conventions, and in communities that have thrived for generations." The fight lands as collectibles have hardened into an asset class, with single cards selling for seven figures — which is exactly why a court calling the on-ramp "gambling" would reshape the market.
Sources: ESPN, Sports Illustrated
Comments