Seattle, WA – A federal jury in Washington state handed down a nearly $25 million award to a class of players who claimed they suffered injuries from participating in two mobile gaming apps, High 5 Casino and High 5 Vegas. This legal decision underscores ongoing tensions between social casino-style applications and state gambling laws.
Previously, a U.S. District Court judge found that these apps constituted illegal gambling under Washington state law, a conclusion that aligns with a broader interpretation of what constitutes “gambling” within the state. This interpretation includes not only traditional betting but also an extension of play in digital formats where virtual items hold value.
This case follows significant precedents set by the Ninth Circuit Court’s decision in Kater v. Churchill Downs Inc., which led to a substantial $155 million settlement. The Kater decision has been pivotal, influencing how courts view social casino-style games under Washington’s gambling statutes.
Washington law specifically treats the virtual currencies used in these apps as “things of value” because they extend gameplay. This is pivotal, as developers often argue that their in-game currencies, which cannot be exchanged for real-world money, should not classify their platforms as gambling venues.
The recent jury award may prompt companies that offer similar apps to reconsider their accessibility in Washington. Given the established court views, and the potential for hefty financial repercussions, companies might opt to either modify their games or restrict access from certain states.
Moreover, at least a few other states have gambling statutes with language similar to Washington’s. While their case law may not be as extensively developed, businesses in the digital gaming sphere should be cautious. The evolving landscape suggests a trend where activities involving extended play with virtual items could increasingly be subjected to gambling laws.
Firms operating in this sector are advised to closely monitor legal developments in each state and consider adjustments to their operations to mitigate risks associated with these interpretations of gambling laws.
This continuous legal scrutiny underscores the complex nature of digital economies and the evolving definitions of value and gambling in the digital age, signaling that this legal terrain will likely remain contested for companies in the gaming industry.
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