High 5 Games Ruled Illegal in Washington: A Six-Year Legal Battle Concludes
After a protracted legal case, two mobile apps offered by High 5 Games have been ruled illegal in Washington, marking a significant victory for those advocating for stricter regulations on online gambling.
Judge’s Verdict
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. 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. This broad definition has led many gaming operators, even social ones, to avoid operating in Washington.
Judge Cartwright determined that High 5's games are prohibited under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The verdict comes six years after High 5 Games player Rick Larsen first filed the suit, bringing to light the contentious debate surrounding virtual currencies and their role in online gaming.
High 5’s Defense
High 5 contended that it operates with virtual coins and is a “social casino.” The company argued that its games emulate video slot machines used for gambling in physical casinos but only use virtual currency. However, Cartwright’s ruling hinged on the fact that High 5’s apps promoted illegal gambling by requiring players to purchase additional chips using real money. Despite the availability of free coins upon registration and periodic awards, users cannot play with regularity unless they are willing to pay.
Under Washington law, virtual currency is recognized as a “thing of value,” even if it cannot be redeemed for cash. This interpretation played a critical role in Judge Cartwright’s decision, emphasizing that the purchase of virtual currency for real money constitutes gambling.
Consequences for High 5
High 5 Games has stated that it has made efforts to cease operating in Washington following the ruling. The company is now liable to pay damages to Larsen and other plaintiffs, with the amount of damages to be determined by a jury. SBC Americas has not yet received a response from High 5 Games regarding the verdict.
Implications and Precedents
The decision could have far-reaching implications for the gaming industry, particularly for operators offering similar services. In a separate but related case, Wilson vs. PTT, LLC, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling law. These companies offer games that are free to play but allow users to purchase additional chips, effectively enabling a form of gambling.
Consumers bet to acquire more chips, which they would otherwise need to buy, further blurring the lines between gaming and gambling. The court’s recognition of virtual currency as a “thing of value” sets a precedent that could lead to increased scrutiny and regulation of online gaming platforms nationwide.
Community and Industry Reactions
While the verdict has been welcomed by anti-gambling advocates, it has raised concerns within the gaming community and industry. Many see the ruling as a potential threat to the future of social casinos and other similar platforms. Critics argue that the classification of virtual currency as a "thing of value" could stifle innovation and limit the types of games available to consumers.
On the other hand, supporters of the decision believe it is a necessary step to protect vulnerable individuals from the potential harms of online gambling. The case underscores the evolving legal landscape surrounding online gaming and the challenges regulators face in keeping pace with technological advancements.
What’s Next?
With the court ruling against High 5 Games and the potential for significant damages, the company faces an uncertain future in Washington. The outcome of the case will likely influence ongoing and future legal battles involving other gaming operators in the state and possibly beyond.
As the industry awaits further developments, all eyes will be on the jury’s decision regarding the damages to be awarded to Larsen and the other plaintiffs. This landmark case serves as a reminder of the ongoing tension between technological innovation in gaming and regulatory efforts to protect consumers.