Summary Statements:
After a protracted legal battle, two mobile apps offered by High 5 Games have been ruled illegal in Washington State.
Ruling of Online Gambling
Western Washington District Court Judge Tiffany Cartwright found that High 5 Casino and High 5 Vegas constitute online gambling, which is illegal in the state of Washington. Judge Cartwright's ruling aligns with the state's classification of online gambling as any activity that requires users to stake value on the outcome of a game of chance or an event with a prize for a certain outcome.
Consequently, many gaming operators, including social gaming platforms, avoid operating in Washington.
High 5's Defense and Court's Counter
High 5 Games defended its operations by arguing that it uses virtual coins and is a “social casino.” The games emulated video slot machines often found in physical casinos, which High 5 claimed was a form of entertainment rather than gambling. However, Judge Cartwright determined that High 5 games violated the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
The verdict came six years after High 5 Games' player, Rick Larsen, first filed the lawsuit. According to the court, the apps promoted illegal gambling by requiring players to purchase additional chips using real money. Although High 5 argued that players could utilize free coins given upon registration and periodically awarded, the court highlighted that users could not play with regularity unless they were willing to pay. Under Washington law, virtual currency is recognized as a “thing of value,” even if it cannot be redeemed for cash.
Ceasing Operations and Damages
High 5 Games stated it has made efforts to cease operating in Washington following the court's ruling. Judge Cartwright ruled that the company is liable to pay damages to Larsen and other plaintiffs, with the exact amount of damages to be determined by a jury.
SBC Americas has not yet received a response from High 5 Games regarding the verdict.
Additional Legal Battles
In a related legal battle, another case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has seen little progress since early 2023. Additionally, Judge Robert Lasnik has ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington State gambling law. Similar to High 5 Games, these companies offer games that are free to play but allow users to pay for additional chips. Consumers bet to acquire more chips, which they would otherwise need to purchase.
Quotes and Implications
In her ruling, Judge Cartwright stated, "The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act.” This sets a legal precedent for similar cases, significantly impacting how gaming operators may conduct their businesses in Washington State.
The broader implications of this ruling could extend to other online gaming and social casino platforms, forcing them to reassess their operational models and compliance with state laws.
Regulatory Environment
This verdict emphasizes the stringent regulatory environment that governs online gambling and related activities in Washington State. With robust measures to protect consumers and ensure ethical business practices, Washington continues to set an example for other states grappling with the legality of online gaming.
The case serves as a crucial reminder for gaming companies to remain vigilant and compliant with state-specific regulations, especially when offering services that may blur the lines between entertainment and gambling.
Future Developments
As the legal landscape continues to evolve, both gaming operators and consumers can anticipate further developments in the regulation of online gaming. Future court rulings and legislative changes will likely shape the dynamics of the industry, influencing how games are designed, marketed, and operated.
The final decision on the amount of damages High 5 Games will pay to plaintiffs like Rick Larsen is eagerly awaited. It will be a telling factor in how other companies assess their potential liabilities and operational risks in similar markets.
Until then, the legal community, industry stakeholders, and players will closely monitor the ongoing and forthcoming legal proceedings, awaiting further clarifications and precedents that will influence the future of online gaming in Washington and beyond.