Flamingo Casino Club, a virtual casino club operating in the Metaverse, was the target of a 22-page cease and desist order from five separate states last week. The states allege that Flamingo is linked to Russian interests, that it has failed to disclose its ties and that it has claimed links to legitimate businesses that have turned out to be non-existent. As a result, Alabama, Kentucky, New Jersey, Texas, and Wisconsin have demanded that the casino immediately bring a halt to its sale of NFTs.
The Metaverse was first announced by Facebook owner Mark Zuckerberg back in 2021, and has seen some early promise as a virtual, extended-reality meeting place. It has also hosted concerts, become something of an online marketplace, and attracted speculation as to whether it will be the future of social media. And while there is a chance for online real money casinos to stake a claim, there is also scope for grifters, fraudsters and panhandlers. It is into this category that the five named states believe Flamingo Casino Club falls.
It is believed that the casino, intending to exploit the unfamiliarity of the new online setting, has fabricated elements of its backstory. Shortly after it opened in March, investigators began looking into the background of Flamingo Casino Club and, according to the lead investigator, found clear links between its proprietors and Moscow. Looking deeper, they found that Flamingo was luring in potential investors with lavish promises that turned out to be less than trustworthy.
Among the offering, which is described in the court filing as a “scam”, Flamingo informed putative casino owners that they would receive half of the profits from their casino as passive income, and that they would be entered into random prize draws which promised glittering prizes such as new iPhones and even free Tesla cars. This was in addition to the promise of live music concerts featuring big-name acts, virtual tennis courts and high-stakes poker tournaments.
In addition, the people behind the club claimed an affiliation with the Flamingo Hotel and Casino in Las Vegas, a link that has been comprehensively denied by the actual casino. All of this is in addition to the fact that not a single detail given as contact information for the people behind the casino has been verifiable. When purchasers sought details such as a phone number, physical address or any demonstration of the identity of its founders, the club’s creators returned radio silence.
As a minimum, it is expected that a casino business will reveal details of its assets, liabilities and revenue when asked, but when investigators sought this information, they were stonewalled. The organization, which launched at almost exactly the same time as Russia began its invasion of Ukraine and oligarchs started to hide assets, also publicly proclaimed that a portion of their profits would go to Ukrainian victims of the war, a claim which has not been backed up by this point. It seems unlikely that it ever will, either, as the Flamingo Casino Club seems set to shut down before it ever really gets off the ground.