Fanatics bans spins and raffles on its Fanatics Live streaming platform but allows random team breaks, which a California whistleblower suit calls unlicensed lotteries. Are card breaks gambling? Gambling Insider investigates.
Fanatics Live, the livestream shopping platform owned by Fanatics, tells sellers it “prohibits gambling” and that “Duck Races, Spins, Rolls, Raffles, Roulette Wheels, and third-party randomized results are not permitted.” The same platform allows random team breaks, the card-break format, in which every buyer pays the same price and is randomly assigned a team.
A whistleblower suit filed under the California False Claims Act says card breaks on Fanatics Live and rival Whatnot are “unlicensed box-break lotteries,” ESPN reported in June. A Fanatics spokesperson declined to comment to ESPN.
The suit lands on a company that sits on several sides of the card-break business. Fanatics makes trading cards through Topps, which it bought in 2022, sells its own mystery boxes, and runs a platform where sellers open cards live. Through its FanCash rewards, it also lets sportsbook customers spend what they earn on bets on items, including signed rookie cards.
Fanatics has also been named as a defendant in at least four antitrust suits brought by breakers, livestream sellers who open sealed card packs on camera and sell spots in them.
Each complaint asks a federal court to stop what it describes as “allegations of gambling” that led to bans. Gambling Insider reported Sept. 25 that TikTok Shop now requires random team breaks to run through its own randomization tool.
Whistleblowers Accuse Fanatics Live of Running Unlicensed Lotteries
The California suit, filed in July 2025 against Whatnot and Fanatics Live, was later unsealed, according to ESPN and the law firm Womble Bond Dickinson. The suit alleges the companies “knowingly failed to pay the required taxes and to obtain mandatory gambling and business licenses,” ESPN reported.
The complaint includes 18 named plaintiffs across at least 11 states who spent from a couple of hundred dollars to more than $4 million on breaks on Whatnot, Fanatics Live, or both, according to ESPN. It asks the court to order Fanatics to “cease supplying product to unlicensed breaking operations” in California.
California’s Department of Justice declined to intervene, a spokesman told ESPN, and the plaintiffs had until August to decide whether to pursue the case themselves. Neither ESPN nor Womble Bond Dickinson names the case or the court. Gambling Insider could not locate the filing or confirm whether the plaintiffs chose to proceed.
Whatnot faces a separate challenge. The Athletic reported in March that attorney Paul Lesko had filed 15 arbitration demands against Whatnot and represented 30 clients, alleging the platform operates an unregulated online casino in breach of California’s lottery laws. By June, the demand covered nearly 70 customers, ESPN reported. The company said it “absolutely reject[s] the characterization in this complaint” and pointed to that statement again in June, ESPN reported. Athlon Sports reported in July that no arbitrator had issued a final ruling, and none has been reported since.
Breakers Say “Allegations of Gambling” Cost Them Their TikTok Accounts
Four breaker businesses have sued TikTok and Fanatics in the US District Court for the Central District of California, all represented by attorney Jeremy Shafer. The suits allege, in varying terms, that Fanatics was falsely presented as the exclusive source of NFL memorabilia and that TikTok banned breakers who would not deal exclusively in Fanatics products.
- GFC & Supply, which trades as Bigpapa Breaks, filed first in October 2025. After the court denied TikTok’s motion to dismiss as moot when GFC amended its complaint, GFC voluntarily dismissed the case on Aug. 14, 2026, according to the docket.
- David Skalsky, suing as successor to QCBripNship LLC, which ran Quad City Breaks, filed in July.
- DormDudesBreaks, an Ohio breaker trading as Dorm Dudes, filed on Sept. 8.
- MVP Breaks filed on Sept. 10.
A fifth breaker, Bigfoot Sports Breaks, sued TikTok on Sept. 11 and filed a notice of related case. Its complaint was not publicly available, so Gambling Insider could not confirm whether it also names Fanatics.
The four complaints share a list of conduct that the breakers want stopped. The list names Fanatics only in connection with trademark and copyright complaints. Its gambling item refers to “allegations of gambling” resulting in “violations and permanent bans,” but does not say who made the allegations.
The MVP Breaks complaint is the most specific. It says the breaker’s TikTok seller account received repeated “strikes” for “purported trademark and intellectual property infringement as well as alleged gambling,” even though it “followed TikTok’s own published gambling policies.”
Fanatics disputes the exclusivity claims. In a March 23 letter filed in the GFC case, Fanatics’ lawyer Lawrence Buterman of Latham & Watkins wrote that, under Fanatics’ memorabilia seller agreement, “nothing in that agreement imposes a requirement on breakers to exclusively sell Fanatics products on TikTok.” None of the allegations in the remaining suits has been tested in court.
Fanatics Live Bans Spins but Allows Random Team Breaks
Fanatics Live launched in July 2023 with card breaks among its first offerings.
Fanatics Live’s seller guidelines state that “all fans who buy into a break must receive trading cards regardless of break format.” Mystery boxes and repacks, packs a seller assembles from opened cards, are permitted if the seller publishes the manufacturer’s “high/low, average price, and checklist.”
The platform’s own guide to breaking says that in a random team break, “teams are assigned randomly after the buy-in period.” The seller guidelines ban “third-party randomized results” and require team- and player-based randomizations to be performed through its Seller OS carousel feature.
Fanatics also sells products of its own with randomized content. It markets Under Wraps as a “mystery box program” of autographed memorabilia under the slogan “Feel The Reveal,” and the Under Wraps page lists no odds. The Dorm Dudes’ complaint describes Under Wraps as “Fanatics NFL helmets.”
Fanatics’ Instant Rips feature lets buyers “buy a pack during a Fanatics Live stream and see your card revealed instantly,” with the physical card stored in a vault.
Buyers can take an instant offer of Fanatics Live credit worth 90% of the card’s appraised value, minus a marketplace fee, a feature Gambling Insider reported in August. Rival digital pack openings are drawing new entrants.
Nick Bell, who leads Fanatics Collect, said on The Ringer’s Sports Cards Nonsense podcast in March 2025 that “the amount of gamification and like fun features that we can build on top of this is exciting,” as Sports Illustrated reported.
Fanatics Lets Bettors Redeem Rewards for Signed Rookie Cards
While its breaks platform faces lottery claims, Fanatics is deepening the links between betting and collectibles. On Sept. 2, it launched a single Fanatics Sports & Casino app that combines its sportsbook (available in 23 states and Washington, DC), its online casino (in New Jersey, Pennsylvania, Michigan, and West Virginia), and its Fanatics Markets prediction market.
Customers earn FanCash on bets and trades that can be redeemed for “signed rookie cards, vintage Mitchell & Ness, and beyond.” Fanatics’ ‘Town Hall’ advertising campaign focuses on the app and FanCash, Gambling Insider has reported.
Fanatics expects to give out more than $1 billion in FanCash this year, Axios reported. “We’d rather give $1 back to customers than spend $1 in advertising,” Matt King, CEO of Fanatics Betting & Gaming, told Axios.
California Regulators Defer to the Attorney General
No US state regulator or attorney general has publicly ruled on whether card breaks are gambling, Gambling Insider found. California’s Gambling Control Commission says the question belongs to the state’s attorney general.
“Any such determination on their legality would have to come from the Attorney General’s Office,” Fred Castaño, the commission’s public information officer, told Gambling Insider. The commission “has no investigative or enforcement authority,” he said.
Fanatics, TikTok, Whatnot, Shafer, Lesko, and the California attorney general’s office had not responded to Gambling Insider’s requests for comment by the time of publication. We will update this story if we hear back from any of them.
The post Whistleblower Suit Calls Fanatics Live Card Breaks Unlicensed Lotteries appeared first on Gambling Insider.