Customers accuse Whatnot of illegal gambling operation over sports card breaks, repacks

Whatnot, one of the largest online live-selling platforms, faces allegations of running an unlawful gambling scheme through randomized box breaks and repacks.

Mar. 16, 2026 at 1:56pm

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Whatnot, an online platform that sold over 76 million sports cards last year, is being accused of conducting an unlawful gambling scheme and violating the RICO Act. Customers have filed arbitration demands claiming Whatnot's randomized box breaks and repack breaks constitute illegal lotteries and gambling. The customers are seeking to have these practices deemed unlawful, as well as restitution, damages, and injunctive relief to halt the randomized breaks and repacks.

Why it matters

The allegations against Whatnot highlight growing concerns about the potential for gambling and addiction within the sports card collecting hobby, which has seen a surge in popularity in recent years. The case could have broader implications for the legality of certain sales practices in the sports card industry.

The details

Attorney Paul Lesko has filed 15 arbitration demands and represents 30 clients with claims against Whatnot. The cases allege that Whatnot's randomized box breaks violate California's ban on illegal lotteries, while the randomized repack breaks constitute illegal 'grab bag' lotteries. Customers claim Whatnot is operating an 'unregulated online casino' that exploits its customer base and generates billions in revenue without the safeguards required of regulated gambling operations.

  • In January 2026, Whatnot reported that sellers on its platform had $8 billion in sales last year, double the figure from 2024.
  • Whatnot 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.

The players

Whatnot

An online live-selling platform that sold more than 76 million sports cards last year.

Paul Lesko

A St. Louis-based attorney known for his sports card legal commentary on social media, who has filed 15 arbitration demands and represents 30 clients with claims against Whatnot.

Jason Masherah

The president of Upper Deck, who has been outspoken about the alleged gambling aspect of sports card repacks.

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What they’re saying

“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

“The way the repacks are being done right now is purely gambling, and it's going to be an issue for our 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.”

— Jason Masherah, President, Upper Deck

What’s next

The judge in the case will decide on Tuesday whether or not to allow the arbitration demands to proceed.

The takeaway

The allegations against Whatnot highlight the growing concerns about the potential for gambling and addiction within the sports card collecting hobby, which has seen a surge in popularity in recent years. The case could have broader implications for the legality of certain sales practices in the sports card industry and the need for stronger consumer protections.