Washington State Residents File Class Action Lawsuit Against Play Money Sites

Following last week’s exodus of PokerStars and a number of social-gaming sites from Washington State in the wake of the Cheryl Kater versus Big Fish Casino case, more lawsuits have been filed against four social games operators, namely DoubleDown Interactive, Huuuge Games, Playtika and High 5 Games.
Similar to the Kater case, these companies have been accused of charging for their “free-to-play” casino games, in so doing breaching the state’s existing gambling law.
Kater versus Big Fish
In March, a US Court of Appeals ruling found that Big Fish Games had violated Washington State’s strict anti-online gambling legislation by charging customers to acquire extra play-money chips. By turning its digital currency into a “thing of value”, Big Fish’s casino operation was seen as constituting gambling, with the decision subsequently leading to a number of other social-gaming sites exiting the state.
One of those sites to block access to its games was PokerStars, despite the fact it doesn’t charge anything to play at its free money poker games. With virtual casino chips being legally ruled as a “thing of value,” though, PokerStars was keen not to fall foul of strict state laws and so posted the following statement:
“As a result of a ruling by the court of appeals on Thursday 29th March, we’ve removed the social gaming (Play Money) from WA. We are hopeful the law will be clarified and that when it is, we will be able to reinstate all Washington players at their current status.”
Four More Lawsuits
Cheryl Kater originally brought her case against Big Fish Casino seeking compensation for the more than $1,000 she spent playing on the site. Following her success in the court of appeals, two more consumers have now filed lawsuits against four more social casinos offering play-money games, including Double Down Interactive, Playtika, High 5 Games, and Huuuge Games. According to Adrienne Benson, she spent around $1,000 purchasing additional play money chips on Double Down, and as her lawsuit states:
“Double Down Casino games are illegal gambling games because they are online games at which players wager things of value (the chips) and by an element of chance (e.g., by spinning an online slot machine) are able to obtain additional entertainment and extend gameplay (by winning additional chips.”
Showing that no lawsuit is too small, Sean Wilson, on the other hand, is seeking damages for the $20 he spent playing across the sites Huuuge, High 5, and Playtika.
A $3.8bn Industry
So-called “free games” are a lucrative part of the gaming industry and according to a JP Morgan report generated revenues of more than $3.8 billion in 2016, with the company forecasting a future growth rate of 10% annually. One area of growing concern, however, is the use of microtransactions in video games, but while regulators may have been slow to set up a clear regulatory environment governing the development, class action litigation has been posing a far greater threat to the operations of game manufacturers.
Japanese video game company Square Enix, for instance, is facing a class action suit over the monetization program in its Hoshi no Dragon Quest, while in the USA firms such as Apple and Google are both facing suits concerning games that permitted children to make in-app purchases via unauthorized means and without their parents’ permission.
One of the recent Washington State lawsuits subsequently states that governments across the world now recognize the similarity between “micro-transaction-based games of chance and games of chance found in casinos”, leading them to intervene in order to limit their availability. As it then points out:
“Unfortunately, such games have eluded regulation in the United States. As a result, and as described below, Defendant’s Huuuge Casino has thrived and thousands of consumers have spent millions of dollars unwittingly playing Defendant’s unlawful games of chance.”