After a lengthy legal battle, two popular mobile applications offered by High 5 Games have been declared illegal in the state of Washington. The Western Washington District Court, under the jurisdiction of Judge Tiffany Cartwright, ruled that High 5 Casino and High 5 Vegas fall under the classification of online gambling, which is prohibited by state law.
The Legal Definition of Online Gambling
In Washington, online gambling is defined as any activity that requires users to stake value on the outcome of a game of chance or an event with a prize offered for a specific result. This broad definition has led many gaming operators, including social gaming entities, to avoid conducting business in the state.
High 5 Games' Defense
High 5 Games argued that its operations involve virtual coins and are categorized as a "social casino." The company contended that its games are merely simulations of video slot machines found in physical casinos. However, Judge Cartwright didn't find this argument convincing. She ruled that the games offered by High 5 fall under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
History of the Case
This verdict arrives six years after Rick Larsen, a player of High 5 Games, initially filed the lawsuit. The court determined that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 Games countered this claim by stating that players could use free coins awarded upon registration and periodically thereafter. However, the court found that regular gameplay necessitated additional financial expenditure.
Virtual Currency as a "Thing of Value"
Washington law recognizers virtual currency as a "thing of value" even if it cannot be redeemed for cash. This recognition plays a crucial role in the court's ruling against High 5 Games, emphasizing that virtual assets used in gambling activities are legally significant.
Efforts to Comply and Pending Damages
High 5 Games stated that it has made efforts to cease operations in Washington following the court's ruling. Despite these efforts, the company has been held liable to pay damages to Rick Larsen and other plaintiffs, with the actual amount to be determined by a jury.
SBC Americas is still awaiting an official response from High 5 Games regarding the recent verdict.
Related Legal Battles
This case isn't an isolated incident. Another lawsuit involving High 5 Games, known as Wilson vs. PTT, LLC, remains active, although it hasn't seen significant progress since early 2023. Additionally, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington's gambling laws. These companies offer games that are free to play but provide users the option to purchase additional chips, creating a scenario where players bet to acquire more chips, otherwise obtainable only through monetary transactions.
Judicial Observations
In the words of Judge Cartwright, "The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act." This statement underscores the court's firm stance on cracking down on online gambling activities that circumvent state laws by utilizing virtual currencies.
As the legal landscape continues to evolve, this landmark ruling could set a significant precedent for similar cases in the future. Both gaming companies and players will be closely watching how these developments unfold, potentially altering how social casinos operate in jurisdictions with stringent gambling regulations.