Reviving the Statute of Anne: Should Lawyers Mine Centuries-Old Statutes for Profit?

By: Robert Ward

For most of American history, state governments strictly prohibited nearly every form of gambling. In the last 100 years, however, many states have loosened gambling prohibitions in favor of a legal, regulated gambling industry. Still, remnants of strict, anti-gambling attitudes remain on the books in many states in the form of “loss recovery acts.” These centuries-old statutes allow a losing gambler to sue the winner and recover their losses. In many states, the statutes go one step further, allowing third parties to recover as much as three times the amount of the loss. While some statutes grant half the amount recovered to the state or local government, many permit the third party to retain the total amount recovered.

These statutes, which have their origin in the Stuart-era “Statute of Anne,” were intended to serve two purposes. First, they were intended to protect the gamblers and their families from potential financial ruin. Second, by allowing third parties to recover, the statutes supplemented state enforcement of gambling laws, particularly at a time when local law enforcement was limited or absent. As attitudes toward gambling evolved and state and local government authority grew, the third-party loss recovery provisions looked like a relic from a bygone era of strong opposition to gambling. But as Judge Richard Posner noted in discussing the Illinois loss recovery statute, “that era has ended.”[1]

Nevertheless, the expansion, and success, of new forms of gaming have revived interest in the third-party loss recovery actions. And just as the gaming industry has innovated, plaintiffs have too. In recent years, companies apparently formed for the purpose of bringing loss recovery actions have filed actions against a diverse array of operators in Georgia, Illinois, Massachusetts, Ohio, South Carolina, and the District of Columbia.[2] While the complaints portray the companies as passionate crusaders against exploitative illegal gambling operations, the potential windfall—triple the “losses” of every player in the state—seems more likely to be the real motivating factor. Each of the six plaintiff LLCs appears to have connections to litigation funding companies.

This new model raises serious questions. First, the plaintiffs’ lack of connection to any losing player suggests that they lack standing to bring these claims in federal court and likely in some state courts as well. Second, the lack of transparency about who owns and controls the plaintiffs—and who would ultimately reap the benefits of recovery, raise serious questions about lawyers’ ethical responsibilities.

Starting with standing, federal law is clear. A newly formed limited liability company created solely for the purpose of pursuing a third-party recover claim under a state loss recovery act does not have Article III standing. The requirements for Article III standing are well known. There must be (1) an injury in fact that is (2) fairly traceable to the defendant’s challenged conduct and (3) likely to be redressed by a favorable judicial decision.[3] The problem for the company plaintiffs is clear: they did not suffer any gambling losses. They therefore did not suffer an injury in fact and do not have standing.

Individual plaintiffs have attempted to resist this result by asserting that loss recovery statutes confer qui tam standing. As the Sixth Circuit recently explained in rejecting this argument, a qui tam statute allows an individual to bring a claim on behalf of the government to redress an injury to the government.[4] While some loss recovery statutes do direct a portion of the recovery to the government, as the Sixth Circuit’s analysis makes clear, that would still not be enough to confer qui tam standing. Because the companies allege that they have no relationship with any losing player, they cannot show that those third parties agreed to transfer their right of recovery to company. Therefore, even if a qui tam statute could allow a third party to bring a claim on behalf of an individual, the individual would need to consent to that transfer.[5] This poses a major hurdle for the companies, who acknowledge that they have not identified the losing players.

The complaints’ crusading language suggests that the companies might attempt to argue that they have associational or organizational standing. Advocacy organizations and trade associations often assert this form of standing in bringing lawsuits to advance the interests of their members. But that argument would almost certainly fail too. An organization seeking to establish this form of standing must show that its members would otherwise have standing to sue on their own behalf.[6] While, at this point, no one but the companies, their members, and the companies’ lawyers know who the members are, the companies’ allegations make it clear that none of the members have suffered gambling losses. Associational standing too, then, is a non-starter.

State law standing doctrines may be more forgiving, but success is far from guaranteed. Even courts that do not strictly apply the federal standard may still require a plaintiff to show that they have suffered an actual injury. For example, while Illinois courts treat standing as an affirmative defense rather than jurisdictional, a plaintiff must still have “some injury in fact to a legally cognizable interest.”[7] In Rhode Island courts, standing is a threshold inquiry that begins with the “pivotal question” of whether the plaintiff has alleged that the defendant’s conduct has caused an injury in fact.[8] New Jersey courts, which have generally taken a more liberal approach to standing than federal courts, nevertheless require a “substantial likelihood” of some harm to the plaintiff as a result of an unfavorable decision.[9] It is difficult to see how a newly formed entity with no connection to the losing players and no alleged losses of its own could satisfy these requirements.

The recent appearance of six generically named plaintiff LLCs, none of which appear to have any public profile, also raises questions about the role of lawyers in pursuing these claims. Under Model Rule 3.1, a lawyer may not bring a claim without a good faith belief in the claim’s merits. Generally, if there is no injured party, there is no legal justification for a claim.

Indeed, under laws as old as the Statute of Anne, the creation of LLCs to pursue litigation for profit would almost certainly qualify as barratry, champerty, or maintenance, which remain crimes in some jurisdictions, though are rarely enforced. Barratry, for example, remains a crime in California, Oklahoma, Pennsylvania, Virginia, Illinois, Texas, Washington, and other U.S. jurisdictions.  These laws were designed to prevent the fomenting or pursuit of litigation for profit or where there would otherwise have been no litigation. As Virginia defines it, “barratry” is “the offense of stirring up litigation.”[10] Illinois law provides that attorneys who engage in barratry should be suspended from practice.[11] Similarly, 720 ILCS 5/32-12 provides that “if a person officiously intermeddles in an action that in no way belongs to or concerns that person, by maintaining or assisting either party, with money or otherwise, to prosecute or defend the action, with a view to promoting litigation, he or she is guilty of maintenance and upon conviction shall be fined and punished as in cases of common barratry.”[12]  Officiousness is synonymous with meddlesomeness and can be described as volunteering one’s services where they are neither asked for nor needed.[13] One could readily conclude that LLCs meet these criteria where they were created for litigation, profess to have no relationship to any person who lost money in a game, and appear to be financed by a litigation funder for profit.

Given the lack of injured parties involved in the lawsuits and the apparent lack of constitutional standing, the ethics of this business model appear questionable. State attorneys general exist to protect consumers and to enforce gaming laws. Lawsuits that redress no injuries and that appear to be nothing more than an investment vehicle serve no one but lawyers and their financial backers.

[1] Sonnenberg v. Amaya Grp. Holdings (IOM) Ltd., 810 F.3d 509, 510 (7th Cir. 2016).

[2] See e.g., Massachusetts Gambling Recovery LLC v. Blazesoft Ltd. et al., No. 2584CV01502 (Mass. Super. Ct. 2025); South Carolina Gambling Recovery LLC v. Underdog Sports Holdings, Inc., No. 2025CP3700520 (S.C. Ct. Common Pleas 2025).

[3] Spokeo v. Robins, 578 U.S. 330, 338 (2016) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)).

[4] Burt v. Playtika, Ltd., 132 F.4th 398, 403 (6th Cir. 2025).

[5] Id. at 403-404.

[6] United Food and Commercial Workers Union Local 751 v. Brown Grp., Inc., 517 U.S. 544, 553 (1996).  

[7] Twigg v. AbbVie, Inc., 2025 IL App (1st) 221581 ¶¶ 48–50.

[8] Narragansett Indian Tribe v. State, 81 A.3d 1106, 1110 (R.I. 2014).

[9] Jen Elec., v. County of Essex, 964 A.2d 790, 801 (N.J. 2009).

[10] Va. Code. § 18.2-451.

[11] 720 ILCS 5/32-11.

[12] Miller UK Ltd. v. Caterpillar, Inc., 17 F. Supp. 3d 711, 725 (N.D. Ill. 2014).

[13] Id.