TLDR
- A California whistleblower suit claims card breaks on Fanatics Live and Whatnot are unlicensed lotteries.
- The suit includes 18 plaintiffs in at least 11 states who spent from a few hundred dollars to more than $4 million on breaks.
- Fanatics Live bans spins and raffles but allows random team breaks run through its own tool.
- Four breaker businesses have sued TikTok and Fanatics, citing bans tied to “allegations of gambling.”
- No US state regulator has ruled on whether card breaks count as gambling.
Fanatics Live, the livestream shopping platform owned by Fanatics, tells sellers it “prohibits gambling.” Its rules ban duck races, spins, raffles, and roulette wheels.
The same platform allows random team breaks. In this card-break format, 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.
What the Whistleblower Suit Claims
The suit was filed in July 2025 and later unsealed. It alleges the companies “knowingly failed to pay the required taxes and to obtain mandatory gambling and business licenses.”
The complaint includes 18 named plaintiffs across at least 11 states. They spent from a couple of hundred dollars to more than $4 million on breaks on Whatnot, Fanatics Live, or both.
The suit asks the court to order Fanatics to “cease supplying product to unlicensed breaking operations” in California. Fanatics makes trading cards through Topps, which it bought in 2022.
California’s Department of Justice declined to intervene. The plaintiffs had until August to decide whether to pursue the case themselves, and it is not clear whether they did.
Whatnot faces a separate challenge. Attorney Paul Lesko has filed arbitration demands alleging the platform runs an unregulated online casino, and by June the effort covered nearly 70 customers. Whatnot said it “absolutely reject[s]” the claims, and no final ruling has been reported.
Breakers Sue TikTok and Fanatics
Four breaker businesses have sued TikTok and Fanatics in federal court in the Central District of California. Breakers are livestream sellers who open sealed card packs on camera and sell spots in them.
The suits allege Fanatics was falsely presented as the only source of NFL memorabilia. They also claim TikTok banned breakers who would not deal only in Fanatics products.
One of the four, GFC & Supply, voluntarily dismissed its case on Aug. 14, 2026. The others were filed by the successor to Quad City Breaks in July, Dorm Dudes on Sept. 8, and MVP Breaks on Sept. 10.
The complaints ask the court to stop “allegations of gambling” that led to “violations and permanent bans.” MVP Breaks says its TikTok account received strikes for alleged gambling even though it followed TikTok’s published policies.
Fanatics disputes the claims. Its lawyer wrote in March that nothing in its seller agreement requires breakers to sell only Fanatics products on TikTok.
Fanatics also sells its own randomized products. Its Under Wraps “mystery box program” of autographed memorabilia lists no odds.
The company’s betting business links to collectibles too. Customers of its sportsbook, casino, and prediction market earn FanCash that can be redeemed for items like signed rookie cards. Fanatics expects to give out more than $1 billion in FanCash this year, Axios reported.
On Sept. 25, Gambling Insider reported that TikTok Shop now requires random team breaks to run through its own randomization tool.
No US state regulator or attorney general has publicly ruled on whether card breaks are gambling. California’s Gambling Control Commission says any decision would have to come from the state attorney general’s office.
