Senior People Business Partner - Operations

The future of card breaking and repacks - insights from California litigation. Wednesday, September 30, 2026 This is the second in a series of client alerts examining legal developments in the trading card repack and card-breaking space. Our first alert, "The Chase Is On: Trading Card Repacks Face Growing Legal Scrutiny," provided an overview of the key legal risks. This alert takes a deeper look at the distinction between card breaking and card repacks, examines the pending Whatnot and Fanatics Live litigation, and offers practical compliance steps to differentiate their products in light of these claims. When we published our first alert in August, we noted that legal scrutiny of repack products was moving from theoretical concern to active dispute. Now, nearly 70 Whatnot customers have filed arbitration demands alleging the platform's randomized card breaks and repack breaks violate California lottery and gambling laws, the federal RICO statute, and state consumer-protection standards. A separate qui tam lawsuit under the California False Claims Act, filed in July 2025 and recently unsealed, names both Whatnot and Fanatics Live, alleging the companies operate unlicensed box-break lotteries and have failed to pay required gambling taxes and obtain mandatory licenses. California's Department of Justice has declined to intervene in the qui tam action, but the plaintiffs may proceed on the government's behalf. No arbitrator or court has ruled on whether randomized card breaks or repacks constitute illegal gambling. Whatnot has denied the allegations, stating that "gambling isn't allowed on Whatnot, and we strictly enforce this policy." These matters remain pending, and the outcomes are uncertain. But the theories of liability and the compliance gaps the complaints identify deserve attention from every operator in this space. Because federal law largely defers to the states on gambling regulation, there is no single national definition of gambling. Instead, each of the fifty states applies its own statutory framework, meaning the legal risk profile for card breaks and repacks can vary significantly from one jurisdiction to the next. California is used here as an illustrative example because it is the jurisdiction at issue in the pending Whatnot and Fanatics Live litigation, but operators should be aware that other states may define gambling differently and impose distinct requirements. Card breaking and Card Repacks are not the same thing. Industry participants often use these terms interchangeably, but they describe different activities with different legal profiles. Card breaking involves opening factory-sealed, manufacturer-issued product on a livestream. Participants buy a "spot," and a randomized tool, a wheel spin, dice roll, or digital selector, may assign each buyer a team, a player, a numbered slot, or a draft position. In the most common randomized formats, the buyer has no control over which team or player they receive. Card repacks involve cards that were previously pulled from manufacturer-issued products and reassembled into new mystery packages by a third-party seller or distributor. Because the operator directly controls the contents, repacks raise distinct concerns around informational asymmetry: the seller may know which packages contain high-value cards. In California, this distinction has direct statutory consequences. California Penal Code Section 319.3 defines a sports trading card "grab bag" as a sealed package containing sports trading cards removed from the manufacturer's original packaging. That definition squarely describes a repack product but does not appear to reach a manufacturer's original, factory-sealed pack. Legal challenges to card breaking using factory-sealed product must instead rely on the general three-element lottery test under California Penal Code Section 319 - consideration, chance, and a prize - which applies more broadly but requires a more fact-intensive analysis. Other states may classify these products under different statutory schemes, and the outcome of such an analysis will depend on the applicable state's legal framework. Operators should understand which category their products fall into and assess their risk accordingly. What the complaints actually allege. We reviewed the arbitration demand against Whatnot in California and qui tam lawsuit and they identify several specific practices that operators should evaluate against their own businesses. Randomized team assignment as the element of chance. The complaints frame randomized breaks as a game of chance, not a retail transaction: buyers are paying for a spot that gives them a random chance of receiving a desirable team, not purchasing identified goods. The complaints do not target all forms of breaking, they focus on formats where the buyer has no control over which team or player they receive. Lack of consumer safeguards. The filings allege Whatnot operated for years without self-exclusion tools, enforceable spending limits, or addiction-support resources, protections that licensed gambling operators are required to provide. The complaints draw explicit comparisons to DraftKings and state-regulated casinos, arguing the platform creates a "carnival-like" environment that encourages compulsive spending. Informational asymmetry and insider knowledge. The complaints allege that some sellers shared information about which repacks contained valuable cards with favored participants and engaged in shill bidding to inflate prices. These allegations highlight the unique risk that arises when the seller controls and knows the contents of a mystery product. Failure to obtain licenses or pay gambling taxes. The qui tam action alleges that Whatnot and Fanatics Live knowingly failed to obtain mandatory gambling and business licenses and failed to pay required taxes, while profiting from what the complaint characterizes as an illicit enterprise. The regulatory direction. The trading card disputes are part of a broader enforcement trend against digital platforms that deliver varying outcomes in exchange for payment. Operators that wait for an adverse ruling before adapting their practices may find themselves responding to enforcement actions rather than preventing them. The time to evaluate your product design, disclosures, marketing, and consumer protections is now. Current public notices. Published: 29 September, 2026 Published: 25 September, 2026 Published: 24 September, 2026 Published: 22 September, 2026 Published: 21 September, 2026 Published: 17 September, 2026 Published: 9 September, 2026

New gambling rules end randomized card breaks on TikTok. September 29, 2026 TikTok restricts randomized card breaks on its platform. TikTok Shop has recently implemented stricter regulations concerning gambling and randomized sales, specifically targeting how trading card breaks operate within the United States. Changes to random team breaks and TikTok's Gambling Policy. Since May, TikTok has updated its Gambling Policy multiple times. Under the new guidelines, random team breaks are only allowed through TikTok Shop's Surprise Sets feature, using TikTok's own randomization software. This contrasts with previous practices where card breaks - which involve opening sealed trading card packs during livestreams and distributing contents to buyers - could assign teams or categories randomly without standardized tools. The May policy removal banned random card breaks, draft-style formats, and bounty breaks, while a June update expanded restrictions to additional formats such as pull games and King of the Hill challenges. The August 31 revision permits eligible sellers to conduct random team breaks solely within Surprise Sets and mandates all random draws to be performed through TikTok's official system, prohibiting any manual or external selection methods. Additionally, raffling off unsold break spots is no longer permitted. Blind box promotions can only feature products originally manufactured as blind boxes by brands acknowledged by TikTok. Not all break types are banned; sellers who meet specific Shop Performance Score criteria may still host personal breaks, pick-your-team breaks, pull-until-you-win breaks, and case breaks, provided products are sealed before the stream and physically shipped to customers post-purchase. Updates to Surprise set guidelines amid gambling regulations. The platform also forbids gambling activities such as raffles, sweepstakes, wagers, and lucky wheels on its Shop service, where buyers pay for chances to win random prizes. TikTok's Surprise Sets extend beyond trading cards, offering categories like electronics, beauty products, toys, and fashion accessories. Previously, the policy set numerical limits on price variation within these sets and required a minimum proportion of higher-value items to ensure transparency of value. However, in September, those numerical thresholds were removed. The current rules instead emphasize fair price distribution and prevent scenarios where expensive items are excessively rare. Sellers must clearly disclose the potential items and quantities featured in Surprise Sets and present available products during livestreams. TikTok reviews these listings to guarantee compliance. Legal challenges and industry impact. These policy updates come amid ongoing legal scrutiny surrounding card breaks. Multiple lawsuits involving TikTok, Fanatics, Whatnot, and Fanatics Live question the legality of certain card break formats, alleging issues related to competition laws, gambling regulations, and lottery-style operations. In California, three break sellers have brought antitrust and unfair competition lawsuits against TikTok and Fanatics. Meanwhile, Whatnot faces legal claims accusing some of its break formats of operating as unlicensed gambling activities.

Autumn Fair partners with Whatnot. Partnership will offer retailers and brands and brands the opportunity to discover a new way to sell, see live shopping in action and have a go themselves at The Clubhouse. Autumn Fair is partnering with Whatnot, the live commerce platform, to give retailers and brands the chance to discover a new way to sell, connect with customers and build online communities, with a dedicated Whatnot experience at the buyer's lounge, The Clubhouse, in Hall 9 throughout the show. Whatnot is the largest live commerce platform in the UK, U.S. and Europe, where businesses showcase products, share their expertise and connect with buyers in real time across hundreds of categories. Through live shows, sellers can answer questions, build relationships with their communities and grow their businesses, bringing the trust and interaction of shopping in person to the online world. The Whatnot experience provides an opportunity to see live commerce in action, meet the experts behind the platform and explore how live selling can help reach new audiences, move more stock and create an additional sales channel. Live commerce is scaling rapidly, with Whatnot holding nearly 60% market share across its markets. The UK is its most established European market and its second largest globally, with sales up 281% year on year. The number of UK sellers has grown by 360% over the past year, while first-time buyers have increased by 374%. During Autumn Fair, Whatnot will create a live commerce studio for visitors to experience live commerce in-person with Whatnot sellers going live from the space, showcasing products and sharing their expertise with audiences in real time. Visitors can drop into The Clubhouse to watch experienced sellers run live shows, see how products are presented and sold, meet the Whatnot team and find out how to get started themselves. The activation is designed to make live commerce accessible and practical, giving retailers and brands the opportunity to see exactly how the platform works rather than simply hearing about the concept. Matthew Mein, Event Director at Autumn Fair & Glee said, "Live commerce is one of the most interesting developments in retail right now, and we wanted to give our visitors and exhibitors the opportunity to experience it for themselves. The Whatnot experience is particularly exciting because visitors can walk into The Clubhouse to watch a live show happening, talk to the experts, and even have a go themselves. For independent businesses in particular, finding new ways to reach customers and build communities is incredibly important. Whatnot offers a completely different way of putting products in front of people, and we're looking forward to offering our audience the chance to discover what it could do for their business." The Whatnot Takeover Join the Whatnot Takeover After Party on Monday 7 September from 4pm-8pm, when The Clubhouse will become a hands-on live commerce experience for buyers and exhibitors. Visitors can have a go at selling live themselves, with 1-to-1 support from the Whatnot team to help them experience the platform first-hand and understand how it could work for their business. There will also be food, drinks and a DJ, creating an informal opportunity to meet the Whatnot team and other retailers and exhibitors. Sign up to the Whatnot After Party and experience live selling for yourself at https://www.autumnfair.com/whatnot-takeover.