Digital Card ‘Repacks’ Draw Billions in Sales — and a Wave of Gambling Lawsuits
Whatnot, Collector Crypt and Fanatics face legal claims that randomized digital card breaks amount to illegal lotteries as sweepstakes firms pile in.
This article was produced with AI assistance and edited by the ON360 newsroom.
A fast-growing market for digital “repack” trading cards, worth billions of dollars a year, is drawing legal challenges in the United States alleging that some products amount to unlicensed gambling. Platforms including Whatnot, crypto-based Collector Crypt and Courtyard.io now sit at the intersection of collecting and wagering, according to Gambling Insider, and several established betting and sweepstakes brands are moving into the space.
Collector Crypt has generated $1 billion in sales since December 2024, Gambling Insider reports, citing Barron’s research that identified 52 sites offering digital repacks. Courtyard.io told Barron’s it is on pace for $2 billion in annual sales. Whatnot, meanwhile, says it accounts for nearly 60 percent of an estimated $22 billion live-selling market across North America and Europe, with sports cards its top U.S. category in 2025 at more than 6.4 million packs sold monthly.
How the products work
Digital repacks let a customer buy a pack containing a randomly assigned physical card, revealed instantly online. The buyer can then ship the card or sell it back to the platform. That resale loop dominates activity. Collector Crypt CEO Tuomas Holmberg told Barron’s that up to 98 percent of cards opened on the site are sold straight back, and blockchain records reviewed by the outlet showed 178 packs opened for every card actually shipped over six months.
Live box breaks work differently. Buyers purchase a “spot” tied to a team or player inside a sealed case, and a livestreamed “breaker” opens the packs, handing out cards as they’re pulled.
Betting brands are already in
Fanatics, which already runs sports betting, online casino and prediction market businesses, offers digital repacks through its Instant Rips product, letting users take the physical card or accept an instant credit equal to 90 percent of its appraised value. Japanese bank Mizuho estimates Fanatics’ collectibles arm could hit $5 billion in revenue this year.
Underdog is preparing its own entry, with new terms effective August 27 describing “Underdog Rips” built on a partnership with Phygitals. Sweepstakes operator Crown Coins is readying “Crown Rips,” bundling digital sports and Pokémon card packs into its coin packages, while AceBet.cc sells physical card packs bundled with sweeps coins redeemable for cash on casino-style games.
Courts asked to weigh in
The legal pressure is mounting fastest against Whatnot. Attorney Paul Lesko filed arbitration demands this spring on behalf of 15 customers, alleging box breaks violate California’s ban on illegal lotteries. By June that figure had grown to nearly 70 claimants, according to ESPN, with a separate lawsuit filed by another group of plaintiffs. Lesko says his clients collectively spent more than $252 million on the platform, and the complaints describe Whatnot as functioning like “an unregulated online casino.”
A separate Utah lawsuit from collector Kevin Parker makes similar claims, though the case is currently stayed pending an arbitrator’s ruling on whether it must proceed through arbitration. A newly unsealed 2025 California False Claims Act suit also names Whatnot and Fanatics Live, alleging unlicensed box-break lotteries and unpaid taxes; California’s Department of Justice has declined to intervene.
Whatnot denies operating gambling on its site, saying breaks have existed in collecting circles for generations and that sellers who run them make up only 4 percent of its seller base. No Canadian regulator has commented on digital repack products, and no equivalent legal action has been reported in Ontario or elsewhere in Canada.
For Ontario consumers, the episode is a reminder that randomized-outcome products sold outside the province’s regulated iGaming market carry no responsible-gambling safeguards. Licensed Ontario operators must offer deposit limits and self-exclusion tools; anyone concerned about their play can contact ConnexOntario at 1-866-531-2600.
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