Over the past week, a number of online gambling companies operating in Washington have been slapped with a series of lawsuits over allegations that the said companies have been violating Washington state law with some of their offerings. As it stands, there are a total of four lawsuits that have been filed against Huuuge Games, High 5 Games, DoubeDown Interactive and Playtika – more could be on the way.
These lawsuits follow a recent Ninth Circuit United States Court of Appeals ruling that overturned a previous decision by a district court pertaining to virtual chips used on Big Fish casino’s social gaming platform. The Court of Appeals ruled in favour of the complainant saying that the virtual chips that were used by then Churchill Downs-owned Big Fish casino represented “something of value.”
The implication here is that the use of the virtual chips in playing games of chance constituted real gambling, which Washington State law defines as “risking something of value on the outcome of a contest of chance or a future contingent event not under the person’s control or influence to receive something of value in the event of a certain outcome.”
This judgement opened up legal floodgates which will certainly have troubling repercussions for the United States social gaming industry. Each of the companies that has a lawsuit filed against them and many others offer a series of games that are typically found in casinos. To play these games, however, customers need to have virtual chips – these have no monetary value. If a player runs out of virtual chips while playing, he or she must either wait for the game to offer more free chips or opt to buy the virtual chips using real money.
According to the lawsuits, since players must have the virtual chips in order to play, they have value. This takes advantage of a vague clause in the Washington State laws that govern gambling. Already, some operators are ceasing their operations in Washington in an effort to dodge the lawsuits, at least until the law is clarified.