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A federal judge in Washington state has ruled that two social casino apps operated by New York-based High 5 Games are illegal under state law.
Western Washington District Court Judge Tiffany Cartwright's decision mandates that High 5 Games must pay damages to affected parties in accordance with Washington’s Recovery of Money Lost at Gambling Act (RMLGA).
The case, brought forward by former player Rick Larsen in a class-action lawsuit filed in 2018, argued that High 5 Casino and High 5 Vegas violated Washington’s Consumer Protection Act (CPA) and the RMLGA. Larsen contended that the apps engaged in illegal gambling practices by requiring players to purchase additional virtual chips with real money after exhausting their initial free virtual coins.
According to court documents, Larsen spent $7,470.50 on these apps. High 5 Games defended itself by noting that players could continue playing using the free coins provided periodically, without needing to spend real money. However, Judge Cartwright supported Larsen's argument, citing precedents that determined the requirement to purchase additional chips effectively turned the games into illegal gambling activities.
Washington state law uniquely considers virtual currency as a "thing of value", even if it cannot be directly converted into cash. The lawsuit highlighted that consumers effectively bet real money to acquire more virtual chips than they would through free means, triggering the legal action under the RMLGA.
As a class-action lawsuit, individuals in Washington who purchased virtual currency for these apps after April 9, 2014, may qualify for damages. Legal actions revealed that Washington residents spent over $21.6 million on the apps between 2014 and 2023, though the exact damages are yet to be determined pending further proceedings.
High 5 Games, which operates with virtual coins and defines itself as a "social casino," argued that its activities do not constitute gambling under Washington law but emulate video slot machines used in physical casinos. Nevertheless, Judge Cartwright upheld that High 5's operations violated state gambling laws and the Consumer Protection Act.
In response to the ruling, High 5 Games stated it has taken steps to prevent Washington residents from accessing its apps by geoblocking and verifying users' addresses.
By fLEXI tEAM