In a significant legal decision, two mobile applications from High 5 Games have been ruled illegal in the state of Washington. The extended legal battle was concluded when Judge Tiffany Cartwright of the Western Washington District Court determined that both High 5 Casino and High 5 Vegas qualify as online gambling, which is prohibited under Washington state law.
Legal Definitions and Implications
Washington's legal framework classifies online gambling as any activity where users stake something of value on the outcome of a game of chance or an event offering a prize. This jurisdiction's stringent gambling laws have led many gaming operators, including social casinos, to avoid the state entirely.
High 5 Games argued that their platforms employ virtual coins and operate as a "social casino." However, Judge Cartwright identified their games as simulations of video slot machines, akin to those found in physical casinos. Under Washington state laws, such activities are forbidden by the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
Background of the Case
The legal dispute, initiated by High 5 Games player Rick Larsen six years ago, culminated in this ruling. The judge found that the apps in question promoted illegal gambling by requiring players to purchase additional virtual chips with real money. High 5 Games countered that players could use complementary coins awarded upon registration and periodically thereafter. However, the periodicity of these free coins was such that regular gameplay without financial expenditure was practically impossible.
One crucial aspect of Washington state law is its recognition of virtual currency as a "thing of value," even if it cannot be exchanged for real money. This interpretation was central to the judgment against High 5 Games.
Company's Response and Future Actions
High 5 Games has indicated that efforts are underway to cease their operations within Washington. Nevertheless, Judge Cartwright has ruled that the company is liable to pay damages to Rick Larsen and other plaintiffs, with the precise amount to be determined by a jury.
As of now, SBC Americas has not received an official response from High 5 Games regarding this legal verdict. In a related matter, a separate case involving High 5 Games, namely Wilson vs. PTT, LLC, is still ongoing but has seen little progress since early 2023.
Broader Industry Implications
The ruling against High 5 Games mirrors judgments against other online gaming companies operating in the state. Judge Robert Lasnik recently found that DoubleDown Interactive and IGT had also violated Washington state's gambling laws. These platforms are typically free to play but offer users the option to purchase additional virtual chips, creating a system where consumers feel compelled to buy chips to enhance their gaming experience.
The legal landscape in Washington serves as a cautionary tale for other online and social casino operators. The state's legislation is clear: engaging users in activities where they spend real money on virtual credits that facilitate gameplay can equate to illegal gambling. This ruling underscores the importance for gaming companies to understand and navigate the complex legal frameworks of the jurisdictions they operate in.
Quote from the Court
Summarizing the court's position, Judge Cartwright 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 statement succinctly encapsulates the court's findings and reinforces the necessity for compliance with state regulations. As the gaming industry continues to evolve, understanding and adhering to regional laws will be crucial for operators aiming to avoid similar pitfalls.
This verdict against High 5 Games adds another chapter to the ongoing narrative of online gaming regulation. The ruling not only impacts High 5 Games but also sets a precedent that could influence future cases and industry practices. As the amount of damages awaits determination by a jury, the broader implications of this decision will likely resonate throughout the gaming community.