On September 27, 2026, a Massachusetts federal judge ruled that the arbitration clauses of Modo Casino’s terms of use are unenforceable. That means a class action lawsuit filed in October 2025 can proceed in federal court instead of arbitration.
The original case, Miranda v. ARB Gaming, LLC (Modo), alleged that Modo Casino was running an unlawful, deceptive, and predatory online gambling site. This operation described itself as a sweepstakes casino with significant free-to-play aspects, but the site’s promotional and gameplay structures were designed to promote real-money gambling.
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Miranda v. ARB Gaming, LLC
The Shamis & Gentile law firm originally filed the lawsuit on behalf of the lead plaintiff, Katia Miranda, though it is a class-action suit representing Massachusetts residents who bought virtual coins on the Modo casino site.
Modo Casino uses the familiar dual-currency system of Gold Coins, which have no real-world value, and Sweeps Coins, which can be redeemed for real money prizes once certain benchmarks are reached. Miranda’s lawyers alleged that the dual-currency system is a workaround to Massachusetts’s gambling laws.
Modo’s unilateral modification clause
In particular, Shamis & Gentile argued that the “unilateral modification clause” lacked mutual consideration and should be struck down. In effect, the clause gave Modo the right to change any term or rule in the terms and conditions and apply it retroactively.
District Judge Allison D. Burroughs of the U.S. District Court for the District of Massachusetts ruled that these laws, which would be changed at any time without notice, were a “condition of whim.”
Burroughs struck down the forced-arbitration clauses as void based on that logic, because the terms were illusory and unenforceable.
Case remains in Judge Burroughs’ court
For now, the case remains in Judge Burroughs’ court. ARB Gaming must file a formal “Answer” that responds to each complaint in the original legal filing. Next, the judge will set a discovery schedule.
During discovery, the two sides will exchange internal emails, documents, and transaction logs. Players and executives will give depositions.
Modo Casino is likely to appeal the decision
ARB Gaming is likely to appeal. The Federal Arbitration Act (FAA) gives companies the right to file an immediate appeal when a district court denies a motion to compel arbitration.
Therefore, ARB will not have to wait until the entire trial plays out to file an appeal. That appeal will send the issue to the U.S. Court of Appeals for the First Circuit.
They will ask Judge Burroughs to stay all proceedings, which pauses the case until the appellate decision is rendered. If the judge denies the appeal, then ARB Gaming’s lawyers will file an appeal with the First Circuit.
In that case, the First Circuit will probably issue a stay, then rule on whether the arbitration clause is valid.
Damages sought against Modo Casino
The original filing called for full restitution of gambling losses for all money Massachusetts consumers lost on Modo.us. Also, Modo must surrender all revenue obtained from Massachusetts residents.
Miranda’s lawyers also seek punitive damages and attorneys’ fees. They have already demanded statutory multipliers. They have also argued that Modo’s actions violate the Massachusetts consumer protection acts and are asking for financial penalties.
The Miranda v. ARB Gaming underscores why so many top online sweepstakes casino operators are changing their terms of service. Rules that can be changed on a whim appear unenforceable in federal court and leave operators at risk of class-action lawsuits.
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