Summary of Legal Ruling Against High 5 Games
In a significant legal determination after an extended court battle, two mobile applications offered by High 5 Games have been ruled illegal in the state of Washington.
Western Washington District Court Judge Tiffany Cartwright found that High 5 Casino and High 5 Vegas essentially constitute online gambling, an activity banned by Washington state law.
Understanding Washington's Stance on Online Gambling
According to Washington law, online gambling is defined as any activity that requires users to stake something of value on the outcome of a game of chance or an event that offers a prize for a specific result. Because of these stringent laws, many gaming operators, including those offering social gaming experiences, opt to avoid operating within the state.
High 5 Games maintained that their applications operate exclusively with virtual coins, promoting themselves as “social casinos.” However, these games closely emulate the video slot machines typically used for gambling in physical casinos, creating a grey area contested in court.
The Court's Verdict
Judge Cartwright ruled that High 5 Games' applications violate both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. The determination arrived almost six years after High 5 Games player Rick Larsen initially filed the lawsuit.
The court found that the apps engaged in illegal gambling practices by necessitating players to purchase additional chips using real money once the free chips—awarded either upon registration or periodically thereafter—were depleted. This model effectively restricts any consistent gameplay unless users are willing to spend real money, a practice deemed illegal under state law.
In Washington, even virtual currencies are treated as a "thing of value" despite being non-redeemable for actual cash, further cementing the court's decision against High 5 Games.
Impact on High 5 Games and Next Steps
High 5 Games has stated that it is making efforts to halt all operations in Washington. Despite these efforts, Judge Cartwright declared that the company is still liable to pay damages to Rick Larsen and other plaintiffs. The exact amount of these damages will be determined by a jury at a future date.
As of now, SBC Americas has yet to receive any official comment or response from High 5 Games regarding the verdict.
Implications for Other Gaming Companies
This ruling runs parallel to another ongoing legal case involving High 5 Games, known as Wilson vs. PTT, LLC. However, this case has seen little progress since early 2023. Additionally, Washington State Judge Robert Lasnik had previously ruled that online gaming companies DoubleDown Interactive and IGT also violated the state's gambling laws. These companies offer games free to play but allow users to purchase additional chips to continue playing, a model similar to that used by High 5 Games.
Legal Standpoints
The crux of these legal disputes is Washington's broad definition of what constitutes gambling. The law's recognition of virtual currency as a “thing of value” effectively brings social casinos, which often thrive on micro-transactions, under the scrutiny of gambling regulations. This poses a significant challenge for gaming companies operating on similar business models.
Quotes from the Ruling
Judge Cartwright's decision underlined the seriousness of the violations, stating: "The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act.” This statement strongly reaffirms the court's position and the state's rigorous enforcement of its anti-gambling laws.
The ruling shines a spotlight on the fine line between social gaming and gambling and serves as a cautionary tale for other gaming companies navigating these complex legal landscapes.
The final determination on damages and the outcomes of other pending cases will be closely watched, with significant implications for the mobile gaming industry as a whole.