High 5 Games Social Casino Damages: A $25 Million Blow to Players

A landmark ruling has seen High 5 Games ordered to pay $25 million in damages to former Washington state players, marking a significant victory for consumer protection in the realm of social casino gaming. This decision underscores the growing legal scrutiny surrounding play-money casinos and their classification as illegal gambling activities.

The Ruling: $25 Million Awarded to Players

A federal jury in Washington state has awarded former players just under $25 million in damages. This substantial sum was levied against High 5 Games following a verdict that confirmed the company violated state gaming laws. The ruling stems from a class-action lawsuit initiated in 2018 by Rick Larsen, who claimed to have lost over $7,470.50 on High 5’s social casino apps.

Washington State’s Unique Stance on Social Casinos

Washington state holds a unique position in the United States, being the only state to explicitly consider play-money casinos as “real gambling” since a ruling in 2018. This distinction is crucial because it allows for the application of state gambling laws to these virtual platforms.

Legal Basis for the Damages

The core of the legal argument revolves around Washington’s Recovery of Money Lost at Gambling Act (RMLGA). This act stipulates that individuals who have lost money or anything of value on illegal gambling games are entitled to recover those losses from the operator. The court found that High 5 Games’ social casino apps, including High 5 Casino and High 5 Vegas, constituted illegal gambling under Washington state law.

The Class Action Lawsuit

The class-action lawsuit, initially filed in 2018, alleged widespread financial losses among Washington residents. Subpoenas served on major social media platforms indicated that these residents collectively spent over $21.6 million on High 5 apps between 2014 and 2023. While the exact figure of damages was to be determined by a jury, the verdict confirmed that players collectively “lost” nearly $18 million while playing the apps.

Precedent from Big Fish Casino

Judge Tiffany Cartwright’s decision was heavily influenced by a 2018 ruling involving Big Fish Casino. In this case, a federal appellate judge determined that virtual play chips used in social casinos could be considered “something of value” under Washington State law. This precedent is significant because it established the connection between virtual currency and real-world gambling.

Big Fish Casino ultimately agreed to pay a $155 million settlement to its former players, further solidifying the legal argument that virtual gambling activities are subject to state gambling regulations. High 5 Games’ case mirrors this precedent, with Cartwright ruling that High 5’s virtual coins “function identically” to those of Big Fish.

The Impact on Social Casino Gaming

This $25 million verdict sends a clear message to social casino operators nationwide. It highlights the legal risks associated with offering games that involve wagering real money on virtual currency. The ruling could potentially lead to further legal challenges against similar platforms and may prompt regulators to take a closer look at the legality of play-money casinos.

Key Takeaways

• Washington state is the only state to classify play-money casinos as illegal gambling.
• The RMLGA allows players to recover losses incurred on illegal gambling games.
• Virtual play chips are considered “something of value” under Washington State law, similar to real money.
• The decision builds on a precedent set by the Big Fish Casino settlement.

Conclusion

The $25 million damages awarded to former High 5 Games players represent a crucial moment in the ongoing debate surrounding social casino gaming. This ruling underscores the importance of consumer protection in the digital age and serves as a warning to companies offering virtual gambling platforms. The legal precedent set by this case may have far-reaching implications for the future of the social casino industry.