According to the latest U.S. gambling report, Pong Game Studios will stop operating games in the state of California. The Canadian gaming company has now agreed to pay $3.5 million to the state following a CA Supreme Court ruling that it was involved in illegal gambling through casino-style sweep cafes across California.
The Canadian game company has provided software to such cafes in many U.S. states over the years, including California. The game includes online slots and poker variations. However, according to a 2015 Supreme Court ruling in California, sweep cafes are illegal and gambling software provided at such places is considered illegal gambling.
Despite the ruling, Pong Game Studios and other gaming companies continued to offer their gaming software to sweep across cafes in the state. Then in 2016, the California Department of Justice and nine county district attorney’s offices filed a lawsuit against the company, alleging it violated the California Unfair Competition Act and the False Advertising Act.
Last Thursday, the state won a long-term victory in Solano County Superior Court. Now, Canadian gaming companies must stop all gambling activities in the state and pay the state US$3.5 million in civil penalties, costs and attorney fees. The company must also waive all rights to seize assets in litigation, and the state has the power to destroy all equipment.
However, if the company fails to comply with the state’s ruling on time, it could have far greater consequences, including paying up to $15 million in additional fees. The developer has not yet commented on last Thursday’s ruling, but has previously acknowledged in a settlement that some operations in California are illegal, unfair or fraudulent.
Kern County District Attorney Cynthia J. Zimmer said the gaming company has not complied with state law for years and is benefiting from the most vulnerable communities. Mr Zimmer added that the cafe was also a hotspot for criminal activity and that the ruling would finally let the software out of the state.
This isn’t the first time a Canadian game company has made headlines for getting into trouble. Not long ago, the Great Canadian Game Company was brought to court by former employees for unfair dismissal. The individual group suit says the company has not received consent for an extension to the temporary layoff period and has provided underwriting payments to employees as severance pay.
The name of the Great Canadian Gaming Corporation was also involved in a massive money laundering scandal in B.C. The company’s River Rock Casino in Richmond has reportedly been the subject of money laundering activities by Asian organized crime groups using dirty money to make huge cash transactions at casinos without questioning the source of their income.
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