Summary Statements:
After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington.
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.
Washington classifies online gambling as anything that requires users to stake value on the outcome of a game of chance or an event with a prize on offer for a certain outcome.
Many gaming operators, even social ones, avoid operating in Washington.
High 5 contended that it operates with virtual coins and is a “social casino.”
High 5’s games emulate video slot machines used for gambling in physical casinos.
Cartwright determined High 5 games are prohibited under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
The verdict comes six years after High 5 Games player Rick Larsen first filed the suit.
The apps promoted illegal gambling by requiring players to purchase additional chips using real money.
High 5’s rebuttal was that players can use free coins given upon registration and periodically awarded.
Users cannot play with regularity unless they are willing to pay.
Washington law recognizes virtual currency as a “thing of value” even if it cannot be redeemed for cash.
High 5 Games says it has made efforts to cease operating in Washington.
Cartwright ruled the company is liable to pay damages to Larsen and other plaintiffs.
The amount of damages will be determined by a jury.
SBC Americas has not yet received a response from High 5 Games on the verdict.
A separate case involving High 5 Games, Wilson vs. PTT, LLC, is still active but has not made progress since early 2023.
Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling law.
The games offered by these companies are free to play but users can pay for additional chips.
Consumers bet to acquire more chips, which they otherwise would need to buy.
Quotes:
“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act.”
---Legal Victory: High 5 Games' Mobile Apps Deemed Illegal Gambling in Washington
Gambling Apps Ruled Illegal
After a protracted legal battle, the state of Washington has successfully classified two mobile apps offered by High 5 Games as illegal gambling. Western Washington District Court Judge Tiffany Cartwright ruled that the apps, High 5 Casino and High 5 Vegas, meet the legal definition of online gambling, which is illegal in the state.
Definition of Online Gambling in Washington
According to Washington law, online gambling is defined as any activity requiring participants to stake something of value on the outcome of a game of chance or an event where a prize is awarded based on a specific outcome. This stringent regulation has led many gaming operators, including social ones, to steer clear of operating within Washington's borders.
High 5 Games' Argument
High 5 Games argued that their apps operate using virtual coins and should be considered “social casinos,” rather than gambling platforms. The company maintained that its games merely emulate video slot machines typically found in physical casinos.
Ruling and Implications
However, Judge Cartwright found that the High 5 games fell under the prohibitions outlined in the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The judge's ruling implies that the company’s activities contravene state law, even though they may be operating in the virtual realm.
The ruling concludes a six-year legal saga initiated by High 5 Games player Rick Larsen. Larsen’s claim centered on the premise that the apps promoted illegal gambling by requiring players to purchase additional virtual chips using real money.
High 5's Defense
High 5’s defense hinged on the notion that players could use free coins given upon registration and those periodically awarded throughout gameplay. However, Judge Cartwright noted that consistent play was virtually impossible without making purchases, effectively making the free coin system insufficient for sustained engagement.
Virtual Currency as "Thing of Value"
Washington law stipulates that virtual currency is considered a “thing of value,” even if it cannot be directly redeemed for cash. Consequently, the purchase of virtual chips for prolonged play falls under the definition of gambling in the state.
High 5 Games has expressed an intent to cease operations in Washington in response to the ruling.
Damages and Further Legal Action
As per Judge Cartwright’s order, High 5 Games is liable to pay damages to Rick Larsen and other plaintiffs in a sum to be determined by a jury. The final amount is yet to be specified, as deliberations continue.
SBC Americas has yet to receive an official comment from High 5 Games regarding the court's verdict.
Meanwhile, another case involving High 5 Games, Wilson vs. PTT, LLC, remains unresolved, showing no significant progress since early 2023.
Broader Implications for the Gaming Industry
This ruling highlights the legal challenges facing online gaming operators in Washington. Judge Robert Lasnik recently ruled that other online gaming companies like DoubleDown Interactive and IGT have also violated state gambling laws. Although their games are free to play, users can purchase additional chips, thereby invoking the same legal scrutiny High 5 Games faced.
Consumers often find themselves wagering for additional virtual chips, which necessitate real money purchases if they run out, aligning these practices with Washington’s definition of gambling.
As the legal landscape continues to evolve, gaming operators must tread cautiously in jurisdictions like Washington that enforce strict regulations on what constitutes gambling.