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.”
High 5 Games' Mobile Apps Ruled Illegal in Washington
After a lengthy legal battle, two mobile apps offered by High 5 Games have been declared illegal in Washington State under the rigorous scrutiny of Western Washington District Court Judge Tiffany Cartwright. The ruling has sent ripples through the gaming community and could change the landscape for online gambling operators nationwide.
The Legal Foundations
Judge Cartwright's finding that High 5 Casino and High 5 Vegas effectively constitute illegal online gambling rests upon Washington's stringent gambling laws. The state categorizes online gambling as any activity requiring users to stake something of value on the outcome of a game of chance or an event where a prize is awarded for a specific result. This broad definition means many gaming operators, including those running "social casinos," avoid operating in the state.
High 5 Games contended that their apps function using virtual coins and are therefore social casinos rather than gambling platforms. However, the resemblance of their games to video slot machines commonly found in physical casinos did not help their case. Judge Cartwright concluded that these games are prohibited under both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
The Case's Genesis and Legal Arguments
The legal saga began six years ago when High 5 Games user Rick Larsen filed the initial lawsuit. The crux of the complaint was that the apps fostered illegal gambling activities by necessitating that players purchase additional chips with real money to continue playing. This, Larsen argued, was tantamount to gambling.
High 5 Games counter-argued that players received free coins upon registration and through periodic awards, contending that regular gameplay is possible without a financial outlay. However, the court found that regular play without monetary investment was impracticable, effectively making purchases necessary.
Moreover, Washington law recognizes virtual currency, like the coins used in these games, as a "thing of value," despite its non-redeemable nature for cash. This interpretation further reinforced the court’s decision against High 5 Games.
Consequences and Industry Impact
In the wake of the ruling, High 5 Games has stated that efforts are underway to cease operations within Washington. Despite this compliance, Judge Cartwright ruled that the company is liable to pay damages to Larsen and other affected parties. The amount of damages will be determined by a jury, adding another chapter to this ongoing legal narrative.
SBC Americas reports that High 5 Games has yet to respond to inquiries about the court's decision. The ruling also casts a shadow on other ongoing cases, such as Wilson vs. PTT, LLC, which has been stagnant since early 2023.
Wider Implications
In a related context, Judge Robert Lasnik had ruled that other online gaming companies, including DoubleDown Interactive and IGT, have also violated Washington’s gambling laws. While these games were initially free to play, users could pay for additional chips to extend gameplay, creating similar issues regarding virtual currency and gambling.
As Judge Cartwright aptly 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 ruling may serve as a precedent for future litigation involving online gaming operators, not only in Washington but potentially across other jurisdictions with comparable laws.
As the gaming world watches attentively, the outcome of the pending jury decision on damages, as well as the resolution of other related cases, will be keenly anticipated. What is certain is that the verdict against High 5 Games marks a significant point in the ongoing debate over the legality and regulation of online gambling in the United States.