After a protracted legal battle, two mobile applications offered by High 5 Games have been declared illegal in the state of Washington.
Judgment by Western Washington District Court
In a ruling issued by Judge Tiffany Cartwright of the Western Washington District Court, it was determined that High 5 Casino and High 5 Vegas qualify as forms of online gambling, which is prohibited under Washington law.
Washington state categorizes online gambling as any activity requiring users to wager something of value on the outcome of a game of chance or any event with a potential prize. This stringent definition has led many gaming operators, including social platforms, to steer clear of operations within the state.
High 5's Defense
High 5 Games argued that their platform operates with virtual coins and is thus a "social casino." However, their games closely mimic video slot machines commonly used for gambling in physical casinos. Despite their defense, Cartwright concluded that High 5's games are in violation of both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
Origins of the Case
The legal case dates back six years when Rick Larsen, a player of High 5 Games, first initiated the lawsuit. The apps in question were found to promote illegal gambling by requiring players to purchase additional chips using real money. While High 5 contended that players could use free coins given upon registration and periodically awarded, it was established that users could not play with regularity unless they were willing to make real-money purchases.
Virtual Currency as "Thing of Value"
Washington law recognizes virtual currency, which cannot be redeemed for cash, as a "thing of value." This recognition played a critical role in Cartwright's decision, leading to her ruling that High 5 Games was liable to pay damages to Larsen and other plaintiffs. The amount of these damages will be determined by a jury.
High 5 Games Ceases Operations in Washington
In response to the ruling, High 5 Games has indicated that it has made efforts to cease its operations in Washington. However, at the time of writing, SBC Americas has not yet received an official response from High 5 Games concerning the verdict.
Ongoing Legal Battles
This is not the only legal issue High 5 Games is contending with. A separate case involving the company, Wilson vs. PTT, LLC, remains active but has seen little progress since early 2023. This case is being overseen by Judge Robert Lasnik. In a related ruling, Lasnik also determined that the online gaming companies DoubleDown Interactive and IGT had violated Washington state gambling laws. Similar to High 5's applications, the games offered by DoubleDown Interactive and IGT are free to play but allow users to pay for additional chips, prompting consumers to bet to acquire more chips rather than purchasing them outright.
Final Thoughts
As of now, the final amount of damages High 5 Games will owe is still undetermined, pending a jury's evaluation. This case sets a significant precedent, underscoring the challenges and regulatory hurdles faced by online and social casino gaming operators.
The implications of this verdict could resonate throughout the gaming industry, particularly in states with stringent gambling laws, shaping how companies approach game design and monetization strategies in jurisdictions with similar legal frameworks.
In summary, the ruling against High 5 Games reiterates Washington’s firm stance against online gambling and the promotion of illegal gaming activities. As the legal landscape continues to evolve, gaming companies must remain vigilant and adaptable, ensuring compliance to avoid similar pitfalls.