Four US states, Texas, New Jersey, Kentucky, and Alabama, have doubled down on Slotie, a casino operating in the Metaverse, issuing cease-and-desist orders due to illegal gambling activities.
Metaverse Casino Slotie Accused of Illegal Gambling Activities and Swindling Investors
CNBC reported that Texas, New Jersey, Kentucky, and Alabama all ordered the virtual casino Slotie to immediately stop the sale of its non-fungible tokens (NFTs).
The company has so far sold about 10,000 NFTs. They are unique ERC-721 tokens, which have been developed via the Ethereum blockchain.
According to state authorities, the casino was luring investors into illegal gambling in the virtual world of the Metaverse and practically scamming them.
Slotie is a virtual casino, which is part of the largest available metaverse – Sandbox. Guests in its virtual space can buy and sell NFTs and they can use those NFTs as virtual casino chips to place wagers on a variety of casino games.
Unfortunately, this form of gambling is deemed illegal according to the gambling regulations of several US states and, therefore, Slotie has been issued with cease-and-desist orders.
Slotie Has Failed to Provide Important Company Information to Its Investors
According to the cease-and-desist orders, Slotie has to stop selling its NFTs to investors. These securities must be registered properly first before they can be offered on the four state’s markets.
In case the company breaches the orders, it shall have to pay a fine, which may be up to $10,000. Slotie, however, has the opportunity to file for a hearing regarding the case within 31 days.
The main accusation against Slotie is that it does not provide transparency to its investors. Information such as who the company founders are, the company address, contact details, etc. is not publicly available so that the company’s clients can access it.
Additionally, Slotie has failed to provide information about its financial situation such as its liabilities, assets, revenue, and so on.
In connection with the Slotie case, Texas state securities board director, Joe Rotunda, raised awareness that the Metaverse is still unchartered territory and while there are legitimate companies present in the virtual world, there are a lot of still unknown ways for scammers and fraudsters to trick people out of their money.
Slotie is registered in the state of Georgia and started operating in October 2021. In the first quarter of 2022, the company succeeded in raising Series A venture capital from an undisclosed venture capital group amounting to $10 million.