Summary Statements:
After a lengthy legal battle, two mobile apps offered by High 5 Games have been ruled illegal in Washington state.
Western Washington District Court Judge Tiffany Cartwright has concluded that High 5 Casino and High 5 Vegas constitute online gambling, which remains prohibited in the state of Washington.
Legal Classifications and Interpretations
The state of Washington classifies online gambling as any activity where users must stake value on the outcome of a game of chance or an event that offers a prize for a specific outcome. Given this broad definition, many gaming operators, even those focusing on social games, have already discontinued operations in the state.
High 5 Games argued that they operate using virtual coins and identify themselves as a “social casino.” Their games emulate the video slot machines typically found in physical casinos, but the company insisted these games should not be classified as gambling.
Judge's Determination
Judge Cartwright determined that High 5’s games are indeed in violation of the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The decision came six years after Rick Larsen, a player of High 5 Games, initially filed the lawsuit.
The court found that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. While High 5 rebutted this by stating that players receive free coins upon registration and periodically thereafter, the verdict pointed out that users cannot play regularly unless they are willing to pay.
Virtual Currency and Its Implications
Under Washington law, virtual currency is recognized as a “thing of value” even if it cannot be redeemed for cash. This interpretation further sealed the fate of High 5 Games’ argument. The company has since stated that it has made efforts to cease operating within the state.
However, Cartwright ruled that High 5 Games is liable to pay damages to Rick Larsen and other plaintiffs involved in the lawsuit. The final amount of damages will be determined by a jury at a later date.
Other Legal Battles
Notably, SBC Americas has not yet received a response from High 5 Games regarding the verdict. Meanwhile, a separate case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has shown no substantial progress since early 2023.
In a related ruling, Judge Robert Lasnik determined that online gaming companies DoubleDown Interactive and IGT had also violated Washington state’s gambling laws. These games, although free to play initially, allow users to purchase additional chips with real money. Consumers bet in hopes of acquiring more chips rather than buying them outright, which constituted gambling under Washington law.
Final Remarks
The implications of these rulings are vast, affecting not only High 5 Games but potentially other gaming operators who employ similar business models. The focus on the use of virtual currency as a "thing of value" could prompt many companies to reevaluate their operations within the state.
As this story unfolds, both the gaming community and legal experts will closely scrutinize further developments. These cases serve as a critical precedent, potentially influencing future legal interpretations of online gaming across other jurisdictions.
High 5 Games now stands at a crossroads, compelled to navigate a newly clarified legal landscape while contemplating its next steps. The verdict is a reminder of the evolving interplay between technology, gaming, and the law.
“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” concluded Judge Cartwright, summing up a decision that has set a significant legal precedent in the world of online gaming.