High 5 Games' Legal Tumble in Washington: A Six-Year Journey Ends
In a significant courtroom decision, two mobile apps offered by High 5 Games have been ruled illegal in Washington state. After a protracted legal case spanning six years, Judge Tiffany Cartwright of the Western Washington District Court found that High 5 Casino and High 5 Vegas constitute illegal online gambling under state law.
Washington's Stance on Online Gambling
In Washington, online gambling includes any activity requiring users to stake value on the outcome of a game of chance or an event where a prize is offered for a certain outcome. This stringent definition has led many gaming operators, even those operating social casinos, to avoid the state altogether.
High 5 Games contended that its offerings utilized virtual coins and were merely “social casinos.” The company's games emulate video slot machines found in physical casinos, but High 5 argued that these virtual coins are not equivalent to real money.
Judge Cartwright's Ruling
Despite High 5's defense, Judge Cartwright determined that both High 5 Casino and High 5 Vegas violated the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. According to Cartwright, the usage of virtual coins, which Washington law classifies as a “thing of value” even if not directly convertible to cash, squaresly places High 5's games under the umbrella of illegal gambling.
One key element in the decision was the way the games promoted gambling behavior by requiring players to purchase additional chips with real money. Although High 5's rebuttal included the point that players are given free coins upon registration and periodically, the court found that regular play would necessitate additional purchases.
The Initial Lawsuit and Damages
It has been a long road since High 5 Games player Rick Larsen first filed the lawsuit six years ago. Moving forward, the company has been deemed liable for damages to Larsen and other plaintiffs, with the exact amount to be determined by a jury. High 5 Games has stated that it has made efforts to cease operations within Washington, but the ruling has already had significant repercussions for the company.
Ongoing Legal Troubles for Gaming Companies
Interestingly, High 5 Games is not alone in facing legal troubles regarding its operations in Washington. Another case, Wilson vs. PTT, LLC, is still active though it has seen no recent progress. In a similar vein, Judge Robert Lasnik previously ruled that online gaming companies DoubleDown Interactive and IGT also violated Washington state gambling laws.
These companies, like High 5 Games, offered games that were free to play but allowed users to pay for additional chips. Consumers participating in these games bet to acquire more chips, which they otherwise would need to purchase. Such mechanisms blur the lines between social gaming and illegal gambling.
Industry Impact and Future Outlook
The recent ruling against High 5 Games underscores the tight regulatory environment surrounding online and mobile gaming in Washington. For gaming operators, the ruling serves as a cautionary tale of the potential legal risks involved in offering similar products in the state. Avoiding Washington altogether remains a viable strategy for many companies until clearer regulations or alternative business models can be successfully established.
As for High 5 Games, the ruling has imparted a heavy blow, forcing the company to rethink its strategy and operations in Washington. With potential damages looming large, the company will likely prioritize re-evaluating its compliance and legal frameworks to stave off further legal challenges.
SBC Americas has yet to receive an official response from High 5 Games regarding the verdict. As the landscape of online gaming continues to evolve with increasingly sophisticated legal frameworks, other operators will be closely watching how High 5 Games navigates its path post-verdict.
In conclusion, the ruling marks a notable development in the ongoing tension between state regulations and the evolving world of online gaming. As the trial phase for determining damages approaches, all eyes will be on Washington to see how the story unfolds for High 5 Games and its counterparts in the industry.