Pong’s gaming system involved a private network of servers and computers in sweepstakes cafes up and down the state. Some states, including California, have outlawed the cafes. The cafes operate out of storefronts, gas stations and convenience stores in more than a dozen states and are estimated to take in more than $10 billion a year, according to a 2014 white paper by the American Gaming Association. The cafes claim to avoid laws against illegal gambling by supposedly selling a product, such as prepaid telephone cards, that include sweepstake entries permitting customers to play the games. The lawsuit said the company provided software to so-called “sweepstakes cafes” that offer Internet-based slot- and poker-style computer games with the possibility of getting cash prizes. But in the settlement, the company acknowledged that some of its operations were “unlawful, unfair or fraudulent” as alleged in the complaint, according to the indictment.īased in Ontario, Canada, Pong Game Studios makes video lottery and other game terminals along with casino-style games for mobile phones. An email to the company seeking comment wasn’t immediately returned.
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