Summary Statements:
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.
Understanding Washington's Online Gambling Laws
Washington classifies online gambling as anything that requires users to stake value on the outcome of a game of chance or an event with a prize on offer for a certain outcome. Due to this stringent definition, many gaming operators, even social ones, avoid operating in the state. High 5 Games, however, contended that it operates with virtual coins and is a “social casino.”
The Legal Argument and Court’s Ruling
High 5’s games emulate video slot machines used for gambling in physical casinos. According to Cartwright’s determination, these games are prohibited under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The decision marks the end of a six-year legal saga that began when High 5 Games player Rick Larsen first filed the suit.
The court found that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5’s main rebuttal was that players can use free coins given upon registration and periodically awarded. However, the court saw through this defense, noting that users cannot play with regularity unless they are willing to pay.
Washington law recognizes virtual currency as a “thing of value” even if it cannot be redeemed for cash. This point was crucial in Cartwright’s ruling against High 5 Games.
High 5 Games’ Response and Liability
In response to the ruling, High 5 Games claimed to have made efforts to cease operating in Washington. However, the court found the company liable to pay damages to Larsen and other plaintiffs. The exact amount of damages will be determined by a jury.
As of yet, SBC Americas has not received a response from High 5 Games on the verdict. This leaves several questions unanswered, including how the company plans to move forward and whether they will appeal the court's decision.
Broader Legal Context and Precedents
This ruling is not an isolated incident. Another case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has seen no progress since early 2023. Additionally, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling law. The games offered by these companies are free to play, but users can pay for additional chips, thereby bet to acquire more chips, which they otherwise would need to buy.
Quotes and Final Thoughts
Commenting on the case, Judge Tiffany Cartwright stated, “The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act.” This ruling is seen as a major blow to High 5 Games and a stern warning to other online gaming operators considering entering the Washington market.
As the legal landscape around online gambling continues to evolve, gaming companies must navigate a complex web of state laws and regulations. This ruling serves as a reminder that what may be considered a “social game” in one state could be deemed illegal gambling in another. Operators must exercise due diligence and be prepared to face legal challenges if they fail to comply with state-specific gambling laws.
The implications of this ruling will likely cause a ripple effect across the industry, influencing how other states interpret and enforce their gambling laws. For now, High 5 Games and similar companies will need to rethink their strategies and operations in jurisdictions with stringent gambling regulations like Washington.