**Summary Statements:**
After a protracted legal battle, two mobile apps offered by High 5 Games have been ruled illegal in Washington state.
Online Gambling Laws and Rulings
In a recent verdict, Judge Tiffany Cartwright, presiding over the Western Washington District Court, has determined that the mobile applications High 5 Casino and High 5 Vegas are, in fact, engaging in online gambling. This constitutes a violation of state law, as online gambling is prohibited in Washington.
According to Washington law, online gambling is identified as any activity where users are required to stake value on the outcome of a game of chance or another event where a prize is awarded for a specific outcome. Due to this stringent classification, many gaming operators, including social gaming entities, often avoid conducting their operations within Washington state.
High 5 Games' Defense
High 5 Games maintained that their operations were purely social, using virtual coins devoid of intrinsic monetary value. They argued that their games, which emulate video slot machines found in physical casinos, do not constitute gambling since real money is not directly wagered. Instead, players could use free coins provided upon registration and periodically awarded to keep playing, negating the need to spend real money.
However, this defense did not hold water in the eyes of the court. Judge Cartwright concluded that the games offered by High 5 Games do fall under the purview of the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. She noted specifically that despite the coins being virtual, the necessity for repeated in-app purchases to continue regular gameplay makes it a form of online gambling.
Long Legal Battle
This ruling marks a significant moment six years after Rick Larsen, a player of High 5 Games, first brought the lawsuit to court. Larsen contended that the apps promoted illegal gambling by requiring users to purchase additional chips with real money to continue playing, should they exhaust the free coins given sporadically by the game.
Although High 5 Games has reportedly made efforts to cease operations in Washington, Judge Cartwright has held the company accountable. This liability decision mandates that High 5 Games pay damages to Larsen and other plaintiffs, with the amount to be determined by a jury at a later date.
Impact on the Industry
This verdict underscores the Washington state's strict stance on online gambling and extends beyond High 5 Games. A separate but related case involving the same company, Wilson vs. PTT, LLC, remains active but has not progressed significantly since early 2023. This case could serve as another touchpoint in the ongoing scrutiny of online gaming companies operating in the area.
Similar rulings have also been observed against other online gaming companies. Judge Robert Lasnik previously ruled that DoubleDown Interactive and IGT violated Washington state gambling laws. Although these companies offered games free of charge, they provided options for users to purchase additional chips, which subsequently became the subject of gambling by users attempting to acquire more without spending more money.
Reactions and Next Steps
High 5 Games has not yet issued a formal response to the SBC Americas regarding the recent verdict. The ruling and the potential damages owed could set a detrimental precedent for similar social casino games operating within the realms of strict state laws.
These legal battles articulate a key message about the regulation of virtual currency and its role within online gaming apps. Washington law's clear recognition of virtual currency as a "thing of value," regardless of its lack of tangible cash value, could potentially prompt reassessments of online gaming models, not just locally but nationwide.
Thus, the ramifications of this legal decision extend far beyond High 5 Games and Washington state, likely influencing the broader online gaming industry's approach to both game design and legal compliance.
For now, all eyes will be on the upcoming jury decision on damages and any developments in the Wilson vs. PTT, LLC case, which could further shape the landscape of online gaming laws and enforcement in Washington.
As the legal landscape continues to evolve, gaming operators must stay vigilant and adaptive to ensure their operations align with existing laws to avoid such costly and protracted legal battles in the future.