Summary Statements:
After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington.
Legal Verdict on High 5 Games
The Western Washington District Court, presided over by Judge Tiffany Cartwright, recently delivered a significant verdict, ruling that two mobile apps offered by High 5 Games, namely High 5 Casino and High 5 Vegas, are illegal in the state of Washington. This decision hinges on the classification of these apps as online gambling platforms, which is a prohibited activity under Washington state law.
Understanding Washington's Stance on Online Gambling
In Washington, the definition of online gambling encompasses any activity that requires users to stake value on the outcome of a game of chance or an event offering a prize for a specific result. This legal framework has led many gaming operators, even those running social gaming platforms, to avoid operating within the state.
High 5 Games contended that its apps operate with virtual coins and should be recognized as "social casinos," distinguishing them from traditional gambling platforms. However, Judge Cartwright found that High 5's games, which simulate video slot machines like those found in physical casinos, fall under Washington's stringent gambling regulations.
Implications of the Ruling
The ruling cites that High 5 Games' offerings are in violation of both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. This determination followed a lengthy legal journey, initiated six years ago when High 5 Games player Rick Larsen first filed the suit. According to the court, the apps promoted illegal gambling by requiring players to purchase additional chips using real money.
High 5 Games argued that players are provided with free coins upon registration and periodically awarded, which can be used in the games. Nevertheless, the court found that in order to play with regularity and at higher stakes, players ultimately needed to spend real money to buy more chips. Under Washington law, virtual currency is recognized as a "thing of value," even if it cannot be directly redeemed for cash.
Response and Future Steps
In response to the verdict, High 5 Games asserted that it has taken steps to cease its operations within Washington. However, Judge Cartwright ruled that the company is liable to pay damages to Rick Larsen and other plaintiffs involved in the suit. The exact amount of these damages will be determined by a jury in a future proceeding.
SBC Americas contacted High 5 Games for their official response to the verdict, but no comments have been received as of yet. It remains to be seen how the company will navigate its legal and operational challenges following this ruling.
Related Legal Matters
In a related development, another legal case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has shown little progress since early 2023. Moreover, Judge Robert Lasnik previously ruled that other online gaming companies, including DoubleDown Interactive and IGT, also violated Washington state gambling laws. Similar to High 5's games, these companies offer free-to-play games where users have the option to purchase additional chips. The legal definition of gambling was found applicable in these cases, as players effectively bet to acquire more chips, which they would otherwise need to buy with real money.
Industry-Wide Repercussions
The verdicts in these cases highlight the complexities and legal challenges faced by online gaming operators, particularly in jurisdictions with stringent gambling regulations like Washington. The classification of virtual currency and its implications for gaming platforms continue to be a contentious legal issue. Operators must tread carefully to ensure compliance with local laws while offering engaging gaming experiences to their users.
As the legal landscape evolves, industry stakeholders will be watching closely to see how these rulings influence both existing and new market entrants. For High 5 Games and other companies affected by these legal decisions, the path forward will likely involve significant adjustments to their operational models to align with regulatory standards.
Concluding Remarks
In conclusion, Judge Tiffany Cartwright's ruling against High 5 Games underscores the rigorous enforcement of gambling laws in Washington State. As the legal proceedings move forward to determine the amount of damages to be paid, the implications of this verdict will reverberate through the online gaming industry. Companies must remain vigilant and adaptive to maintain compliance and navigate the regulatory complexities of the markets they serve.