Summary Statements:
After a lengthy legal battle, two mobile applications offered by High 5 Games have been declared illegal in the state of Washington.
Western Washington District Court Judge Tiffany Cartwright ruled that High 5 Casino and High 5 Vegas constitute online gambling, which is prohibited in the state.
Definition of Online Gambling in Washington
Washington identifies online gambling as any activity that requires users to stake value on the outcome of a game of chance or an event with a prize offered for a certain outcome. As a result, many gaming operators, even social ones, avoid doing business in Washington. High 5 argued that it operates with virtual coins and is a "social casino” rather than a gambling site.
The Legal Rationale
High 5’s games emulate video slot machines commonly used for gambling in physical casinos. However, Cartwright determined that High 5 games are prohibited under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The verdict arrives six years after High 5 Games player Rick Larsen initially filed the suit.
The court found that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 countered that players could use free coins provided upon registration and periodically awarded. However, users cannot play with regularity unless they are willing to pay. Washington law recognizes virtual currency as a "thing of value," even if it cannot be redeemed for cash.
High 5 Games’ Response and Current Status
High 5 Games stated it has made efforts to cease operating in Washington. Cartwright ruled the company liable to pay damages to Larsen and other plaintiffs. The specific amount of damages will be determined by a jury. SBC Americas has not yet received a response from High 5 Games regarding the verdict.
Broader Implications
This decision could trigger significant repercussions for other gaming companies operating under a similar model. A separate case involving High 5 Games, Wilson vs. PTT, LLC, remains active but has seen little progress since early 2023. Previously, Judge Robert Lasnik ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling law. The games offered by these companies are free to play, but users can pay for additional chips. Consumers bet to acquire more chips, which they otherwise would need to buy.
Judicial Viewpoint
The legal viewpoint is unequivocal. “The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” stated Judge Cartwright. This ruling sets a precedent that other similar cases will likely refer to in the future.
The implications of this verdict extend beyond High 5 Games, serving as a cautionary tale for other developers of "social casino" games. As technology continues to evolve, so too will the laws and regulations surrounding digital and online gambling. Companies operating in this space must remain vigilant and compliant to avoid legal repercussions.