Targeting Social Casinos
The lawsuit specifically called out the social casino business model, an option that allows players to purchase virtual coins for gaming. Real money is not a factor here, like online casino sites, but the lawsuit argued that High 5 Games’ monetized system is gambling.
The plaintiffs in the case state that players were not allowed to win money but were required to spend money to purchase more virtual currency to continue gaming sessions. In Washington and other states, wagering something of value while playing a game of chance is a key element of gambling law.
In this case, the plaintiffs argued that the virtual chips held value as they allowed players to extend gaming sessions. The court agreed, and High 5 Games was ruled against.
Standing Their Ground
High 5 Games fought the case and claimed that its games are for entertainment purposes only. Players are not exploring actual gambling, as there is no option for cashing out wins. The jury did not agree with this argument, and High 5 Games must now pay a huge settlement to players.
The ruling could have a major effect on the social casino industry. It sets a precedent regarding what constitutes illegal gambling when connected to social gaming. Social casinos mimic real online casino sites by offering similar games that require no purchase.
Players are given free coins to spin slots or play table games. They can also win real prizes via Sweeps Coins or their equivalent.
Over the past few years, several lawsuits have emerged arguing that the services are gambling based on specific state laws. The decision of this court ruling could cause social casinos to change their business model to avoid legal action in the future.
Only High 5 Games is impacted by such a large settlement cost for now. However, there are more lawsuits currently on the table that may affect other operators in the future based on the end ruling.
