2 hours ago
Whatnot, one of the sports card industry’s largest online sales platforms, is being accused of conducting an unlawful gambling scheme and violating the RICO Act by allowing sellers to hold randomized box breaks and randomized repack breaks on its platform.
Paul Lesko, a St. Louis-based attorney known for his sports card legal commentary on social media, said he’s filed 15 arbitration demands and represents 30 clients with claims against Whatnot. The arbitration demands claim randomized box breaks violate California’s ban on illegal lotteries (Whatnot was incorporated in Delaware, but its headquarters is in California), while randomized repack breaks constitute illegal sports trading card “grab bag” lotteries.
“Whatnot represents that it operates a ‘marketplace’ where live-shopping helps connect ‘buyers’ and ‘sellers.’ This is a false front,” the cases claim. “Functionally, Whatnot operates an unregulated online casino where it exploits its customer base by encouraging compulsive spending and in the process generates billions in revenue without providing the safeguards required of regulated gambling operations.”
Those demanding arbitration are asking for Whatnot’s randomized box breaks and repacks to be deemed unlawful lotteries/gambling and unfair business practices, restitution/disgorgement of all monies wrongfully obtained, compensatory and punitive damages, an order to require Whatnot to implement warnings about the addictive nature of its platform and to establish consumer protection measures such as self-exclusion mechanisms, spending limits and addiction support and injunctive relief to halt randomized breaks and repack products.
Like many companies, Whatnot’s terms of service require users to resolve disputes through a private arbitration process rather than through the public court system. However, it provides a window of 30 days from first use of the app to provide written notice of opting out of the arbitration agreement and “exercise your right to trial by judge, as permitted by applicable law.”
Sellers on Whatnot had $8 billion in sales last year, double the figure from 2024, the company reported in January. It said more than 20 million users opened new accounts in 2025, and sports cards was the No. 1 category on the platform with more than 6.4 million cards purchased per month.
“We absolutely reject the characterization in this complaint,” Whatnot said in a statement to The Athletic. “Gambling isn’t allowed on Whatnot, and we strictly enforce this policy. … Card breaks are a long-standing format in collecting — at card shops, conventions, and in communities that have thrived for generations. And while sellers who ‘break’ only make up 4 percent of sellers on our platform, we’ve taken care to bring that experience online in a way that holds everyone accountable. Whatnot shows happen live and on camera, sellers face real consequences when they break our rules. We’ve set the standard for how these formats work online, and we’re committed to maintaining it.”
Box or case breaks serve as one of the most popular methods of buying sports cards today. It can be a more affordable way to acquire cards of the specific players or teams you want, rather than buying boxes of cards on your own. It can also be a risk where you may get less value in cards than what you paid.
Box breaks typically occur through live streams on the internet and are hosted by hobby shops, online vendors or individual sellers. The process involves a dealer selling the rights to a configuration of cards from sealed packages (usually large quantities of them) before they’re opened. The most common configurations sold are by team or individual player. So for a fraction of the total cost of all the packages being opened, you can buy the rights to all the cards of that one team or player that come out of them. If no cards from the team or the player purchased show up in the packs, the buyer walks away with nothing. But if a rare or valuable card of that team/player is pulled, the buyer gets it for much less than they could on the open market.
A repack typically contains one card — either graded or ungraded — that has already been pulled from its original pack or box produced by a trading card manufacturer. The card is repackaged by individuals, hobby shops, online sellers and larger scale companies and placed in literal or virtual mystery boxes, depending on if it’s being sold at a physical location or digitally. Customers pay to open it, and the card inside can range in value from less than the purchase price to far more.
Lesko said a number of Whatnot’s customers approached him last summer during the National Sports Collectors Convention in Rosemont, Ill., with concerns about Whatnot.
“They went to this platform to initially just buy cards and quickly found out that that’s not what it is. It’s gambling,” Lesko said. “The platform makes its money off of gambling. And our clients had quickly gotten addicted to it. … It’s the dopamine hit. At some point, they even stop caring about the cards. It’s just that dopamine hit from bidding and actually winning an auction to win a spot for the potential to get a team that they want. We think randomized breaks, breaks that start off with a wheel spin or a card game or a dice, anything that basically starts off with a casino game before you actually get to the cards is illegal gambling. … This has led to difficulties with their relationships, with their significant others, with friends, with jobs. They’re in debt, living on their credit cards, and it’s just this endless cycle that keeps repeating.”
While repacks continue to be prolific within the hobby, some industry leaders have been outspoken about the alleged gambling aspect of the practice.
“The way the repacks are being done right now is purely gambling, and it’s going to be an issue for our industry,” Upper Deck president Jason Masherah told The Athletic last year in an interview about the repack industry. “You can’t go out, sell a product, guarantee a return, put the values of every card out there. You’re determining the values of the cards. The beauty of the card market is that we have no idea what they’re going to sell for on the secondary market. These repacks, they’re determining the value. They’re buying and selling. They’re promising a return. It is 100 percent pure gambling the way it’s being done right now, and something bad is going to happen at some point.”
