Legal Ruling on High 5 Games' Mobile Apps: A Closer Look
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. This ruling has significant implications for online gaming operators, especially those trying to skirt around gambling laws by utilizing virtual currencies.
Definition of Online Gambling in Washington
Washington classifies online gambling as any activity that requires users to stake value on the outcome of a game of chance or an event with a prize offered for achieving a certain outcome. This broad definition has led many gaming operators, including those running “social” casinos, to avoid the state altogether.
High 5 contended that it operates using virtual coins and is a “social casino.” However, Judge Cartwright's ruling determined that High 5's games emulate video slot machines found in physical casinos. Consequently, they fall under the prohibitions set by the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
The Legal Battle and Verdict
The verdict comes six years after High 5 Games player Rick Larsen first filed the suit. Larsen and others argued that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 countered by stating that players could use free coins given upon registration and periodically awarded, but the reality is that users cannot play with regularity unless they are willing to pay. This dependency on purchases for continued play strengthened the argument that the games were, in fact, a form of illegal gambling.
Virtual Currency as a 'Thing of Value'
Washington law has an expansive view of what constitutes a "thing of value." Even if virtual currency cannot be redeemed for cash, it still falls under the state’s gambling laws. The fact that players can buy additional coins with real money to continue playing was a significant factor in determining the legality of High 5's operations in Washington.
High 5 Games has stated that it has made efforts to cease operating within the state. However, Judge Cartwright ruled that the company is liable to pay damages to Larsen and other plaintiffs. The amount of damages will be determined by a jury at a later date.
Ongoing Cases and Industry Impact
SBC Americas has not yet received a response from High 5 Games on the verdict. Meanwhile, a separate case involving High 5 Games, Wilson vs. PTT, LLC, is still active but has not made any progress since early 2023. This case isn't the only one in recent history; 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, mirroring the business model used by High 5. Consumers bet to acquire more chips, which they otherwise would need to buy, thus engaging in what Washington State sees as online gambling.
Conclusion
The case against High 5 Games highlights the stringent nature of Washington’s gambling laws. It paints a cautionary picture for other online gaming operators who might consider operating in the state. As the definition of what constitutes a "thing of value" broadens, it is evident that even virtual currencies can fall under the purview of state gambling laws.
As the legal landscape continues to evolve, it will be essential for online gaming companies to review and potentially revise their operations to ensure compliance. High 5 Games is just one of many companies likely to face similar legal challenges in the future, and the outcomes of these cases could set significant precedents affecting the entire industry.
The final determination of damages to be paid by High 5 Games to the plaintiffs, to be decided by a jury, will be another critical development to watch. This case underscores the importance of adhering to state regulations and the risks involved in trying to navigate around them.
As the situation develops, industry experts and legal analysts will closely monitor how this ruling influences the future operations of online casinos and gambling apps not just in Washington but across the United States.