Digital Trading Card Gambling Is Raising Legal and Player Safety Questions

Digital trading card gambling is emerging as one of the more unusual gray areas in the U.S. gambling industry, with platforms handling billions of dollars in card sales now facing lawsuits over whether their randomized products amount to illegal wagering. Whatnot, crypto-based Collector Crypt, and Courtyard.io are among the biggest names in the space, and mainstream gambling operators are moving in fast.

The timing matters. As sweepstakes casinos face tighter state-level scrutiny, several have started using trading cards as a new revenue stream. That overlap is exactly why U.S. players should understand what these products actually are before spending money on them.

What Digital Trading Card Platforms Actually Sell

Most of these platforms sell “digital repacks.” A player buys a pack, and a randomly selected physical card is revealed instantly on screen. The player can then have the card shipped or sell it straight back to the platform.

That resale option is doing most of the heavy lifting. Collector Crypt’s CEO has said that as many as 98% of cards opened on the platform get sold back immediately. Blockchain records reviewed by Barron’s showed 178 packs opened for every card that was actually shipped over a six-month period.

Live box breaks work differently. A player buys a “spot” tied to a team or player inside a sealed box of cards, then watches a livestreamed “breaker” open the packs and hand out cards based on what turns up.

How Big the Market Has Gotten

Barron’s identified 52 websites now selling digital repacks. A few figures show how fast the category has scaled:

• Collector Crypt has generated $1 billion in sales since December 2024
• io is reportedly on pace for $2 billion in annual sales
• Whatnot accounts for close to 60% of the roughly $22 billion live-selling market across North America and Europe
• Sports cards were Whatnot’s top U.S. category in 2025, with more than 6.4 million sold per month

Gambling Operators Are Moving Into Trading Cards

The clearest crossover comes from Fanatics, which already runs sportsbook, online casino, and prediction market products alongside its collectibles business. Its Instant Rips feature lets a player reveal a card digitally, then either keep it or take an immediate cash offer worth 90% of its appraised value.

Underdog is preparing to launch its own version, called Underdog Rips, through a partnership with Phygitals. Sweepstakes brands are following the same path:

• Crown Coins is rolling out Crown Rips, bundling a randomized sports or Pokémon card into eligible coin packages
• AceBet sells physical card packs bundled with Sweeps Coins that customers can use on casino-style games or redeem for cash

The fact that gambling companies are entering this space does not automatically make the products themselves gambling. That distinction is exactly what U.S. courts are now being asked to sort out, and it connects directly to the patchwork of state gambling laws that already govern sweepstakes casinos and online wagering.

Legal Challenges Facing Card Breaks

Attorney Paul Lesko has filed arbitration demands on behalf of nearly 70 Whatnot customers, arguing that randomized box breaks violate California’s ban on illegal lotteries. A separate lawsuit from a different group of plaintiffs is also moving forward, and Lesko says his clients have collectively spent more than $252 million on the platform.

Whatnot faces an additional Utah lawsuit alleging it runs an illegal gambling enterprise, though that case is currently stayed pending an arbitration decision. A 2025 California False Claims Act suit, unsealed more recently, accuses Whatnot and Fanatics Live of running unlicensed lotteries and skipping required gambling and business licenses.

Whatnot has denied the allegations. The company says it does not permit gambling on its platform and that sellers who run card breaks make up only 4% of its total seller base.

Responsible Gambling Concerns Are Growing Alongside the Lawsuits

The legal questions are only part of the story. A recovering gambling addict named Zachary Capp told The Athletic that live card-breaking platforms contributed to a second stay in rehab, and he estimated his losses on Whatnot at hundreds of thousands of dollars.

Gambling-blocking software provider GamBan has since added Whatnot and Fanatics Live to its blocklist, citing gambling mechanics that no gaming regulator currently oversees. Treatment provider Birches Health also reported a 207% jump over the past year in patients mentioning digital repacks and trading cards by name.

That pattern should sound familiar to anyone who already recognizes the warning signs covered in gambling addiction resources: chasing losses, escalating spend, and a product that feels like collecting until the money adds up.

What This Means for U.S. Players

The legal status of digital trading cards still depends on the specific mechanics of each product and the state where a player lives, so nothing here is settled law yet. What is clear is that a randomized pack with a resale option and an instant reveal shares more with a slot spin or a online lottery ticket than with traditional card collecting.

Players who feel unable to stop opening packs, chasing a specific pull, or reselling cards just to buy more should treat that as a signal worth taking seriously. Free, confidential support is available around the clock through the National Problem Gambling Helpline at 1-800-GAMBLER, and players who want to cut off access to a platform entirely can look into self-exclusion tools built for exactly that purpose.

Digital Trading Card Gambling FAQs

Are digital trading card packs considered gambling?

It depends on the state and the specific product. Several lawsuits currently argue that randomized box breaks and repacks function as illegal lotteries, but no U.S. court has issued a final ruling that applies across the industry.

Why are gambling companies like Fanatics and Underdog entering this market?

Trading cards combine collectible demand with a repeat-purchase model similar to loot boxes, which makes them attractive to companies that already understand how to monetize randomized rewards.

Is it safe to spend money on digital repacks?

Treat it the same way you would any wagering-style product. Set a budget in advance, track how much you are spending on packs versus what you actually keep, and stop if you notice yourself chasing losses.