Legal Battle Concludes: High 5 Games' Apps Ruled Illegal in Washington
After a lengthy legal battle, two mobile apps offered by High 5 Games were declared illegal in Washington State. The ruling was made by Western Washington District Court Judge Tiffany Cartwright, who concluded that the games High 5 Casino and High 5 Vegas constitute online gambling, an activity prohibited in Washington.
Definition of Online Gambling in Washington
Washington State has stringent laws against online gambling, defining it as any activity where users stake value on the outcome of a game of chance or an event for a chance to win a prize. Given this definition, many gaming operators, including those offering social games, opt to steer clear of Washington. Despite High 5's contention that it operates a "social casino" with virtual coins, Judge Cartwright ruled that their games emulate video slot machines commonly used for gambling in physical casinos.
Violation of State Laws
High 5 Games fell foul of the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act, according to Judge Cartwright's ruling. The verdict marks the end of a six-year journey for Rick Larsen, a player who first filed the suit against High 5 Games. The crux of the issue lies in the apps' mechanics, which promoted illegal gambling by requiring players to purchase additional chips using real money.
Arguments and Counterarguments
High 5 Games argued that players could use free coins provided upon registration and periodically awarded to continue playing. However, they failed to convince the court that users can sustain regular gameplay without making in-app purchases. Washington law is quite clear on this matter: virtual currency is considered a "thing of value" even if it cannot be redeemed for cash. Hence, the court found the apps' structure in violation of the state's gambling regulations.
Liability and Future Actions
Judge Cartwright ruled that High 5 Games is liable to pay damages to Rick Larsen and other plaintiffs involved in the case. The exact amount of these damages will be determined by a jury at a later date. In response to the verdict, High 5 Games has reportedly made efforts to discontinue its operations within Washington State. As of this writing, SBC Americas has not received an official response from High 5 Games concerning the verdict.
Precedents and Ongoing Cases
This case is not an isolated incident. Another case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has seen no progress since early 2023. Additionally, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT violated Washington state gambling laws. Much like the High 5 Games' apps, the games offered by DoubleDown Interactive and IGT are free to play but allow users to purchase additional chips for real money. Players can bet to acquire more chips, which they would otherwise need to buy, thereby skirting the legal boundaries set by the state.
Implications for the Gaming Industry
These rulings highlight the fine line that gaming companies must tread to comply with state-specific gambling laws. Washington's rigid stance against any form of online gambling, including those that involve virtual currencies, sets a precedent that could impact how other states approach similar cases. The decision also serves as a cautionary tale for other gaming operators who might attempt to navigate the gray areas of these laws.
As the gaming industry continues to evolve, so will the legal frameworks that govern it. While states like Washington adopt a stringent view on online gambling, others might take a more lenient approach. Operators must stay well-informed and agile to adapt to these regulatory challenges, ensuring that their platforms match the diverse legal landscapes they operate in.
The High 5 Games case underscores the importance of understanding and adhering to local gambling laws to avoid costly legal battles and reputational damage. As companies strive to engage users through innovative gameplay, they must also ensure that their business practices are legally sound and transparent.