Washington Court Declares High 5 Games' Apps as Illegal Gambling

After a prolonged legal battle, a court in Washington has determined that two mobile apps from High 5 Games are illegal. Judge Tiffany Cartwright of the Western Washington District Court ruled that High 5 Casino and High 5 Vegas fall under the category of online gambling, which is prohibited in the state.

Washington’s laws classify online gambling as any activity where s stake value on the outcome of a game of chance or an event with a prize. This stringent definition has led many gaming operators, including those offering social casino games, to steer clear of the state.

High 5 Games argued that its apps, which use virtual coins, should not be considered gambling. They claimed these games are “social casinos,” emulating slot machines found in physical casinos without actual monetary stakes. However, Judge Cartwright found that the games still violate the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.

“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” Cartwright wrote in her decision.

Legal Implications and Response

The legal decision comes six years after player Rick Larsen initiated the lawsuit, alleging that High 5 Games’ apps promoted illegal gambling by requiring real money to purchase additional chips. High 5 contended that players could opt to use free coins awarded upon registration and periodically thereafter, negating the need to spend real money.

Despite this defense, Cartwright referred to precedents set by other district courts, highlighting that the ability to play regularly without spending money is not feasible. Washington’s unique stance on virtual currency, recognizing it as a “thing of value” even without cash redemption, was a crucial factor in the ruling.

In response to the lawsuit, High 5 Games has tried to cease operations in Washington by implementing geoblocking measures and requiring players to confirm their addresses. Nonetheless, the court ruled that the company must pay damages to Larsen and the other plaintiffs, with the amount to be determined by a jury.

Related Cases and Wider Impact

This case is part of a broader trend of legal challenges faced by social casino operators in Washington. Another case in the Western Washington District Court, Wilson vs. PTT, LLC, also involves High 5 Games and remains active.

Additionally, earlier this month, Judge Robert Lasnik in Seattle federal court ruled that DoubleDown Interactive and International Game Technology (IGT) violated Washington’s gambling laws with their “social casino” games. These games are free to play but allow s to purchase additional chips. The lawsuit argued that consumers wager to acquire more chips, which they would otherwise need to buy.

Class-Action Settlement

As Reuters reported on June 2, 2023, a U.S. judge approved a $415 million class-action settlement involving DoubleDown Interactive and International Game Technology. The settlement resolved claims that the companies’ social casino games constituted unlawful gambling under Washington state law. U.S. District Judge Robert Lasnik described the settlement as “fair, reasonable, and adequate,” concluding over four years of litigation.

The settlement was part of a series of related cases. Despite denying any liability, DoubleDown and IGT argued that the claims were based on novel interpretations of Washington’s gambling laws. The games are free to play, but s pay for additional chips. Plaintiffs’ lawyers argued that s bet to acquire more chips, entitling them to recover losses under Washington state law.

Class stood to receive significant compensation, with some individuals potentially receiving hundreds of thousands of dollars. Judge Lasnik awarded the lead class attorneys nearly $121.5 million in legal fees, recognizing the litigation’s challenging nature.

The case, Benson et al v. DoubleDown Interactive LLC et al, underscores the legal risks for social casino operators in Washington and sets a precedent for future cases.

After a prolonged legal battle, a court in Washington has determined that two mobile apps from High 5 Games are illegal. Judge Tiffany Cartwright of the Western Washington District Court ruled that High 5 Casino and High 5 Vegas fall under the category of online gambling, which is prohibited in the state.

Washington’s laws classify online gambling as any activity where s stake value on the outcome of a game of chance or an event with a prize. This stringent definition has led many gaming operators, including those offering social casino games, to steer clear of the state.

High 5 Games argued that its apps, which use virtual coins, should not be considered gambling. They claimed these games are “social casinos,” emulating slot machines found in physical casinos without actual monetary stakes. However, Judge Cartwright found that the games still violate the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.

“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” Cartwright wrote in her decision.

Legal Implications and Response

The legal decision comes six years after player Rick Larsen initiated the lawsuit, alleging that High 5 Games’ apps promoted illegal gambling by requiring real money to purchase additional chips. High 5 contended that players could opt to use free coins awarded upon registration and periodically thereafter, negating the need to spend real money.

Despite this defense, Cartwright referred to precedents set by other district courts, highlighting that the ability to play regularly without spending money is not feasible. Washington’s unique stance on virtual currency, recognizing it as a “thing of value” even without cash redemption, was a crucial factor in the ruling.

In response to the lawsuit, High 5 Games has tried to cease operations in Washington by implementing geoblocking measures and requiring players to confirm their addresses. Nonetheless, the court ruled that the company must pay damages to Larsen and the other plaintiffs, with the amount to be determined by a jury.

Related Cases and Wider Impact

This case is part of a broader trend of legal challenges faced by social casino operators in Washington. Another case in the Western Washington District Court, Wilson vs. PTT, LLC, also involves High 5 Games and remains active.

Additionally, earlier this month, Judge Robert Lasnik in Seattle federal court ruled that DoubleDown Interactive and International Game Technology (IGT) violated Washington’s gambling laws with their “social casino” games. These games are free to play but allow s to purchase additional chips. The lawsuit argued that consumers wager to acquire more chips, which they would otherwise need to buy.

Class-Action Settlement

As Reuters reported on June 2, 2023, a U.S. judge approved a $415 million class-action settlement involving DoubleDown Interactive and International Game Technology. The settlement resolved claims that the companies’ social casino games constituted unlawful gambling under Washington state law. U.S. District Judge Robert Lasnik described the settlement as “fair, reasonable, and adequate,” concluding over four years of litigation.

The settlement was part of a series of related cases. Despite denying any liability, DoubleDown and IGT argued that the claims were based on novel interpretations of Washington’s gambling laws. The games are free to play, but s pay for additional chips. Plaintiffs’ lawyers argued that s bet to acquire more chips, entitling them to recover losses under Washington state law.

Class stood to receive significant compensation, with some individuals potentially receiving hundreds of thousands of dollars. Judge Lasnik awarded the lead class attorneys nearly $121.5 million in legal fees, recognizing the litigation’s challenging nature.

The case, Benson et al v. DoubleDown Interactive LLC et al, underscores the legal risks for social casino operators in Washington and sets a precedent for future cases.

Source: 

“Washington court rules High 5 Games social casino is illegal”. SBC Americas. June 14, 2024.

“US court approves ‘social casino’ $415 million class settlement”. Reuters. June 2, 2023.