After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington. Western Washington District Court Judge Tiffany Cartwright found that High 5 Casino and High 5 Vegas constitute online gambling, which is illegal in the state.
Washington State’s Definition of Online Gambling
Washington classifies online gambling as any activity requiring users to stake value on the outcome of a game of chance or an event with a prize on offer for a certain outcome. As a result, many gaming operators, even those that are primarily social in nature, avoid operating in the state. High 5 Games, however, contended that its operations using virtual coins qualify as a “social casino.”
High 5’s games emulate video slot machines used for gambling in physical casinos, a factor that significantly influenced Judge Cartwright's decision. She determined that High 5's games are prohibited under both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
Origins and Progress of the Legal Case
The verdict comes six years after High 5 Games player Rick Larsen first filed the suit. Larsen argued that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 countered that players could use free coins given upon registration and periodically awarded thereafter. Nevertheless, it was noted that users cannot play with regularity unless they are willing to pay.
In this context, Washington law recognizes virtual currency as a “thing of value,” even if it cannot be redeemed for cash, leading to the conclusion that High 5's practices violated state gambling laws. Consequently, High 5 Games announced it has made efforts to cease operating in Washington. However, the company remains liable to pay damages to Larsen and other plaintiffs. The exact amount of the damages will be determined by a jury.
Ongoing Legal Battles
SBC Americas has not yet received a response from High 5 Games concerning the verdict. Separately, another case involving High 5 Games, Wilson vs. PTT, LLC, is still active but has seen little progress since early 2023. This case is also being watched closely by those in the gaming industry.
Judge Robert Lasnik had previously ruled that online gaming companies DoubleDown Interactive and IGT similarly violated Washington state gambling law. The games offered by these companies are free to play but allow users to pay for additional chips. Consumers are essentially betting to acquire more chips, which they would need to buy if they ran out.
Legal Precedents and Future Implications
These rulings establish significant legal precedents that could impact various online gaming operators. “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. This clear statement sets a tone for how similar cases might be judged in the future.
As online gaming continues to surge in popularity, legal frameworks around it are likely to undergo further scrutiny and evolution. The rulings in Washington highlight the challenges and complexities of balancing innovative entertainment offerings with existing laws. While appeals and further legal maneuvering are probable, companies in the industry must now tread carefully to avoid similar legal setbacks.
The ramifications of these cases go beyond the companies directly involved. Other online and mobile gaming operators will likely reassess their terms of service and business practices to ensure compliance with local and state laws. In effect, these legal decisions serve as a warning and a guide for the industry at large.
Ultimately, as gaming technology and consumer habits evolve, so too must the legal structures that govern them. Stakeholders—from developers to legislators—will need to work collaboratively to develop fair, clear guidelines that protect consumers while allowing for innovation and enjoyment in the gaming world.
The verdict against High 5 Games represents a critical juncture in this ongoing process, signaling that while virtual gaming can offer fun and engagement, it must also adhere to the rigorous standards set forth by the law. The result of the jury's determination of damages will be awaited with great interest, as it could set a significant financial precedent for the industry.