Washington State Judge Confirms Social Casinos Are Illegal
Social casinos are still casinos in the eyes of Washington State's judicial system. A Washington state court has ruled that two mobile games, High 5 Casino and High 5 Vegas, developed by High 5 Games, constitute illegal gambling under state law.
A screenshot of the High 5 online social casino page. (Source: High 5)
LISTEN TO THIS ARTICLE:The decision comes after a lawsuit filed by Rick Larsen against PTT LLC, dba High 5 Games, LLC (High 5). Larsen argued that the apps, while offering virtual coins for free, ultimately facilitated illegal gambling by allowing players to purchase additional coins for real money, which could then be used for in-app wagers.
Related: High 5 Games Enters Ontario via DraftKings PartnershipWashington law prohibits most forms of online gambling. High 5, in its defense, argued that its apps functioned as social casino experiences, not real money gambling. It emphasized that the virtual coins offered in the games held no monetary value and could not be redeemed for cash or prizes. Therefore, High 5 couldn't be accused of offering illegal gambling.
However, Judge Tiffany Cartwright disagreed. In her ruling, she determined that the virtual coins did indeed constitute items of value under Washington law, given players could use them to participate in games that mimicked real-world casino activities.
This distinction between "free-to-play" with in-app purchases and illegal gambling is a growing point of contention in the mobile gaming industry. Many games offer virtual currencies that can be used to purchase cosmetic items, power-ups, or even gameplay advantages.
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Virtual Currency is Still Currency
When these virtual currencies can be used for activities that resemble real-money gambling, legal questions arise. In the case of High 5 Casino and High 5 Vegas, Judge Cartwright found that the in-app purchases went beyond simple cosmetic enhancements and facilitated a gambling-like experience, thus violating Washington's Recovery of Money Lost at Gambling Act. In addition, on all online social casino platforms, including High 5, players can also purchase coins, which would automatically label the platform as a gambling site.
The court's decision also cited the Washington Consumer Protection Act (CPA) in its ruling. The lawsuit argued that High 5's marketing tactics were deceptive, promoting the apps as free-to-play while failing to disclose the emphasis on purchasing additional coins for a more substantial gaming experience. Judge Cartwright's decision appears to agree with this assessment, highlighting the potentially misleading nature of the apps' marketing strategy.
Following Judge Cartwright's order, High 5 faces potential damages awarded to Larsen and the class of consumers he represents. The exact amount of compensation will be determined by a jury trial. This verdict sets a significant precedent for the regulation of social casino apps in Washington and potentially other states with similar gambling restrictions.
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