Summary of the Case
After a protracted legal battle, two mobile apps offered by High 5 Games have been ruled illegal in Washington. The Western Washington District Court Judge, Tiffany Cartwright, found that High 5 Casino and High 5 Vegas constitute online gambling, which is prohibited in the state.
Washington classifies online gambling as any activity requiring users to stake value on the outcome of a game of chance or an event with a prize awarded for a certain outcome. As a result, many gaming operators, even those offering social games, avoid operating in Washington.
The Legal Argument
High 5 Games contended that it operates with virtual coins and defines itself as a “social casino.” However, these games emulate video slot machines commonly used for gambling in physical casinos, a point that Judge Cartwright found pivotal. According to her ruling, the activities of High 5’s 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 key issue revolved around the practice of requiring players to purchase additional chips using real money, promoting what the court saw as illegal gambling. High 5 rebutted by stating that players could use free coins given upon registration and periodically awarded, but the judge noted that 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.
Financial and Legal Repercussions
The court’s decision mandates that High 5 Games is liable to pay damages to Rick Larsen and other plaintiffs involved in the case. The amount of these damages will be determined by a jury. High 5 Games has indicated that it has made efforts to cease operating in Washington following the ruling, but the legal repercussions remain significant.
SBC Americas has not yet received a response from High 5 Games regarding the verdict. The company faces potential financial damages that could impact its operations and future development strategies.
The Broader Context
This ruling fits into a broader narrative of legal challenges facing online gaming companies operating in Washington state. Another case involving High 5 Games, Wilson vs. PTT, LLC, is still active but has not made progress since early 2023. Additionally, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling laws. These companies offer games that are free to play but include the option for users to pay for additional chips. Consumers often bet to acquire more chips, which they would otherwise need to buy, thereby constituting gambling under state law.
Quotes from the Ruling
In summarizing the court’s decision, Judge Tiffany 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 strong statement underlines the court’s position on the illegality of High 5’s activities, setting a precedent for similar cases in the future.
Industry Implications
This ruling has significant implications for the gaming industry, particularly for companies offering social casino games. With Washington’s stringent stance on online gambling, it may lead to increased scrutiny and regulatory pressures in other states. Companies operating in the gaming sector need to closely monitor these legal developments to ensure compliance and avoid similar legal challenges.
Conclusion
The ruling against High 5 Games serves as a stark reminder of the legal complexities surrounding the online gaming industry. As courts continue to grapple with the nuances of virtual currency and user engagement models, companies must adapt quickly to navigate this evolving landscape. While High 5 Games and other companies face immediate financial and operational impacts, this case underscores the importance of legal vigilance and adherence to state-specific regulations for all players in the online gaming market.