Summary of Legal Rulings Against High 5 Games in Washington
After a lengthy legal battle, two mobile applications offered by High 5 Games have been declared illegal in Washington state. The ruling came from Western Washington District Court Judge Tiffany Cartwright, who determined that High 5 Casino and High 5 Vegas constituted online gambling, which is prohibited under state law.
Washington's Definition of Online Gambling
Washington state's legal framework classifies 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 for a specific outcome. Due to such stringent regulations, many gaming operators, including those offering social gaming experiences, opt to avoid operating within Washington.
High 5 Games, however, contended that their operations utilized virtual coins and thus fell within the realm of “social casinos.” Their games emulate the slot machines found in physical casinos, which form the core of many gambling establishments.
Judge Cartwright's Decision
Despite High 5’s defense, Judge Cartwright ruled that the company's gaming operations violated both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The ruling has significant implications; it comes six years after High 5 Games player Rick Larsen initially filed the suit against the company.
The judge determined that High 5 Games promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 argued that players receive free coins upon registration and as periodic rewards, but the court found that under Washington law, these virtual currencies are recognized as a “thing of value” even when they cannot be redeemed for cash. Therefore, players must pay to continue gaming with regularity, an act that effectively constitutes online gambling.
Legal Liabilities and Damages
Judge Cartwright's ruling has led to High 5 Games being held liable for damages to Rick Larsen and other plaintiffs involved in the lawsuit. The amount of these damages will be determined by a jury. High 5 Games has since indicated that they have made efforts to cease operations in Washington state.
Ongoing Legal Challenges
SBC Americas reached out to High 5 Games for a response to the verdict, but has yet to receive a reply. Meanwhile, another case involving High 5 Games, Wilson versus PTT, LLC, remains active but has seen no significant progress since early 2023.
In a related matter, Judge Robert Lasnik ruled that other online gaming companies, DoubleDown Interactive and IGT, also violated Washington state gambling laws. These companies offer games that are free to play but provide users with the option to purchase additional chips. Consumers can gamble these chips with the objective of winning more, which they would otherwise need to buy.
Implications for the Online Gaming Industry
The rulings against High 5 Games and other companies underscore the complexities and challenges faced by the online gaming industry, particularly in regions with stringent gambling laws like Washington. The definition of what constitutes online gambling remains a critical legal issue, especially considering the rise of social casinos and virtual currencies.
These court decisions could set important precedents and potentially drive other online gaming operators to reassess their business models and strategies when dealing with virtual currencies and in-game purchases.
Given the high stakes involved, it stands to reason that other gaming operators will watch these cases closely, as they navigate the delicate balance between offering engaging gaming experiences and complying with local and state laws. The outcome of these legal battles may well reshape the landscape of online gaming not just in Washington but possibly across other states with similar regulatory climates.
In conclusion, High 5 Games’ legal challenges illustrate the importance of understanding and adhering to state-specific gambling laws, an area that remains highly scrutinized by both lawmakers and the judicial system. As the industry evolves, ongoing dialogue and legal interpretations will likely continue to shape its future.
Stay tuned as SBC Americas continues to monitor and report on developments in this critical sector.