Summary Statements:
After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington.
Legal Ruling Against High 5 Games
In a landmark decision, Western Washington District Court Judge Tiffany Cartwright has ruled that the mobile apps High 5 Casino and High 5 Vegas, both offered by High 5 Games, constitute illegal online gambling under Washington state law.
What Constitutes Online Gambling in Washington?
Washington classifies online gambling as activities requiring users to stake value on the outcome of a game of chance or an event with a prize. This strict interpretation of the state's gambling laws has deterred many gaming operators, even those offering social games, from operating in Washington.
High 5 Games had contended that its operations involved virtual coins and were strictly "social casinos." However, the court found that High 5's games are essentially emulations of video slot machines used in physical casinos.
Violation of Washington Laws
Judge Cartwright determined that High 5's operations are in violation of both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The apps promote illegal gambling by requiring users to purchase additional chips using real money. The verdict comes six years after High 5 Games player Rick Larsen first filed the suit. Cartwright stated that the games' design necessitates player expenditure if they wish to participate regularly, acknowledging that free coins provided intermittently are insufficient for consistent gameplay.
Virtual Currency as a “Thing of Value”
Under Washington law, virtual currency is considered a "thing of value," even if it cannot be redeemed for cash. This played a critical role in the court's decision against High 5 Games, stressing that the virtual coins used in these apps fit the legal definition of gambling currency.
Response and Damages
High 5 Games has asserted that efforts were made to cease operations in Washington following the legal allegations. Still, the court ruled that the company is liable to pay damages to Larsen and other plaintiffs. The exact amount of damages owed will be determined by a jury. High 5 Games has yet to issue a formal response to the verdict as reported by SBC Americas.
Ongoing Legal Issues
It is noteworthy that High 5 Games is also engaged in a separate legal case, Wilson vs. PTT, LLC. This case, however, has made little progress since early 2023. Additionally, Judge Robert Lasnik has ruled that other online gaming companies, such as DoubleDown Interactive and IGT, have similarly violated Washington state gambling laws. Their games are free to play but offer users the option to purchase additional chips, creating a similar scenario of betting more chips to continue gameplay without direct monetary exchange.
Quotes:
“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” stated Judge Cartwright in her ruling.
The legal battle against High 5 Games signals a broader crackdown on online gambling activities masked as social casinos in Washington. This ruling serves as a stern reminder to gaming operators about the strict legal landscape surrounding online and virtual gambling within the state. The case sets a precedent that could have far-reaching implications for similar apps and platforms offering virtual currencies and rewards.
This development has instigated a broader dialogue among gaming industry stakeholders about compliance and the potential liabilities of offering games of chance in jurisdictions with stringent gambling laws.