Summary Statements:
After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington.
Overview of the Verdict
In a landmark decision, Western Washington District Court Judge Tiffany Cartwright ruled that High 5 Games' apps—High 5 Casino and High 5 Vegas—constitute online gambling, a practice illegal in Washington state. This ruling underscores Washington's strict laws governing online gambling, defining it as any form of gameplay requiring users to stake value on a game of chance or an event with a prize based on a specific outcome.
Details of the Case
High 5 Games maintained that their apps function with virtual coins and are categorized as “social casinos.” However, Judge Cartwright found that these games mimic video slot machines commonly found in physical casinos, thus infringing upon existing gambling laws. The judgment was reached in accordance with the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
The Six-Year Legal Battle
The legal suit was initiated six years ago by High 5 Games player Rick Larsen. The crux of the argument against High 5 was that the apps promoted illegal gambling by compelling players to purchase additional chips with real money to continue playing. High 5 countered by asserting that players receive free coins upon registration and periodically thereafter, making it possible to play without spending money. However, Judge Cartwright pointed out that players could not engage in regular gameplay without financial investment.
Washington’s Stance on Virtual Currency
One noteworthy aspect of Washington law is its stance on virtual currency. Even though the virtual currency used in these games cannot be redeemed for actual cash, it is still recognized as a “thing of value." This classification places additional scrutiny on games like High 5 Casino and High 5 Vegas, which require some form of monetary transaction to extend gameplay.
Consequences for High 5 Games
High 5 Games disclosed that they have made steps to discontinue operations within Washington state. Nonetheless, given the court's decision, the company is liable to pay damages to Rick Larsen and other plaintiffs involved in the case. The jury will determine the exact amount of these damages, adding another level of consequence to the company's legal woes.
SBC Americas has not yet received comment from High 5 Games regarding the recent verdict.
Additional Legal Challenges
Interestingly, this case is not the only legal challenge High 5 Games is facing. Another ongoing case, Wilson vs. PTT, LLC, remains unresolved, having seen no progress since early 2023. However, it’s essential to note that this isn't isolated to High 5 alone. In a similar ruling, Judge Robert Lasnik found that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling law by offering games that are free to play but allow users to purchase additional chips.
These rulings emphasize the importance of understanding the legal frameworks that govern online gaming, especially in states like Washington with stringent gambling laws. Companies operating in this space must navigate carefully to avoid substantial legal repercussions.
Implications for the Gaming Industry
The ruling against High 5 Games could serve as a precedent for future legal actions against similar operators. The distinction between what constitutes social gaming versus gambling is crucial, and this case may prompt other gaming operators to reevaluate their offerings in regions with stringent gambling legislation.
Moreover, the decision underscores the complexity and evolving nature of gambling laws, particularly as they intersect with technology and digital platforms. As the online gaming industry continues to expand, legal scrutiny is likely to increase, making regulatory compliance a critical focal point for business operations.
In summary, the case against High 5 Games offers a stark reminder of the legal challenges inherent in the online gaming industry. It highlights the necessity for companies to remain vigilant and compliant with state laws to avoid substantial legal and financial repercussions.