Collectors say Whatnot turned its sports-card "breaks" and mystery "repack" boxes into something that looks a lot like a gambling operation that preyed on enthusiasts and cost some people real money. Thirty users represented by a St. Louis attorney have filed arbitration demands accusing the platform of running an unlawful lottery and, in some filings, violating federal racketeering laws. The claims have pushed the live-commerce company into the middle of a debate over whether modern online break formats cross the line from hobby to gambling.
What customers are alleging
As reported by The New York Times, the arbitration demands say sellers who run randomized box breaks and repacks are effectively selling chances to win high-value cards and that Whatnot profits by facilitating those sales. Plaintiffs are seeking restitution, compensatory and punitive damages, consumer-protection remedies and injunctive relief to halt the alleged practices. The filings, which the paper says include detailed examples of repack formats and buyer losses, frame the site's live streams as a business model built around chance.
Whatnot's policy and response
Whatnot's own Help Center explicitly bans facilitating or promoting Gambling and purchase-based prizes on the platform, and it lists raffles, guess games and raffles for unsold spots as forbidden conduct. The policy tells sellers they are responsible for making sure shows, listings and sales comply with Whatnot's Terms and with applicable law, as outlined by Whatnot Help Center. The company has told reporters it does not allow gambling on the app and that it enforces those rules.
Who's pressing the case
St. Louis attorney Paul Lesko, who describes himself as a hobby-industry litigator, says he represents roughly 30 Whatnot users and has filed multiple arbitration demands on their behalf, per Lesko Law LLC. Lesko has litigated in the collectibles space before and told reporters that some buyers developed addictive behaviors around break formats that promise big hits. His involvement has helped crystallize a broader push by collectors and consumer advocates to scrutinize live-stream breaking formats.
Platform scale and what's at stake
Whatnot has grown into a major marketplace: sports cards were the company’s top category, with more than 6.4 million cards purchased per month, and the platform said more than 20 million new accounts opened in 2025. Sellers on the site did roughly $8 billion in sales last year, according to company figures and reporting by The New York Times. Those numbers help explain why a small share of sellers who run breaks, which Whatnot says make up about 4% of its seller base, can still move large sums of money and generate friction with collectors.
Why repacks ignite arguments
Repack boxes, mystery products that often mix singles, pulled "hits" and graded cards, blur the line between retail and roulette for many buyers. Critics say repacks and some live breaks are sold as entertainment but priced and promoted with odds that skew heavily toward sellers' margins, a problem that prompted Whatnot to roll out stricter rules for "professionally sealed surprise products" late last year. That policy shift and the wider repack crackdown were covered by hobby outlets and industry reporters as a response to a spike in transparency complaints and resealed-pack scandals, according to Athlon Sports.
Legal angle and arbitration
The plaintiffs have pursued arbitration, the dispute-resolution path Whatnot's Terms of Service favors, which includes a class-action waiver and a detailed "mass filings" process that could complicate group relief. Whatnot's terms give users a 30-day window to opt out of the arbitration clause by sending written notice to [email protected] or to its legal address in San Francisco, and the contract routes most disputes to JAMS under the Federal Arbitration Act, per Whatnot's Terms. That architecture will shape whether customers can coordinate broadly or are forced to pursue individual claims.
What to watch next
Arbitrators are expected to sort out whether randomized repacks are legally indistinguishable from lotteries under state law and whether the platform's enforcement and product-vetting systems were adequate. Industry observers warn the case could push faster regulatory attention to live-commerce formats, and hobby reporting has framed the dispute as part of a wider reckoning over transparency and seller audits on live-sell apps, as noted by Athlon Sports. For collectors, the practical takeaway is to favor vetted repacks, review seller checklists and remember that live breaks are entertainment, not guaranteed investments.
