Legal Battle Concludes: High 5 Games' Apps Deemed Illegal in Washington
In a landmark judgment, two mobile apps developed by High 5 Games have been declared illegal in the state of Washington. This decision comes after a protracted legal battle, with Western Washington District Court Judge Tiffany Cartwright finding that the apps in question—High 5 Casino and High 5 Vegas—constitute online gambling, which is outlawed in the state.
Definition of Online Gambling
According to Washington law, online gambling encompasses any activity that requires users to wager something of value on the outcome of a game of chance or an event where a prize is offered based on a specific result. While many gaming operators, including social gaming companies, typically avoid operating within Washington, High 5 Games had contended that their apps operated using virtual coins, classifying them as "social casinos."
However, Judge Cartwright rejected this argument. She noted that High 5’s games closely emulate video slot machines found in traditional, bricks-and-mortar casinos. As such, they fall under the purview of the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
Details of the Ruling
The legal proceedings began six years ago, when a High 5 Games player named Rick Larsen initially filed the suit. Cartwright ruled that the apps promoted illegal gambling by requiring players to purchase additional chips using real money. High 5 had countered this claim by arguing that players could use free coins provided upon registration and periodically awarded thereafter. Despite this, Cartwright found that users would be unable to play regularly without making in-app purchases.
Importantly, Washington state law recognizes virtual currency as a "thing of value," even if it cannot be directly redeemed for cash. This interpretation was pivotal in the decision against High 5 Games. In response to the ruling, the company stated that it has made efforts to cease its operations in Washington.
Financial Implications
The court's decision means that High 5 Games is liable to pay damages to Larsen and other plaintiffs involved in the case. The exact amount of these damages will be determined by a jury at a later date. As of now, SBC Americas has not received a formal response from High 5 Games regarding the verdict.
Wider Impact
The verdict against High 5 Games has broader implications for the online gaming industry. Judge Cartwright’s ruling could serve as a precedent for other states with similar legislation. Currently, another case involving High 5 Games, known as Wilson vs. PTT, LLC, remains active but has seen little progress since early 2023.
In a separate but related case, Judge Robert Lasnik found that online gaming companies DoubleDown Interactive and IGT also contravened Washington’s gambling laws. These companies offered games free to play but allowed users to purchase additional chips to continue playing, effectively turning in-game purchases into a form of gambling. Consumers would bet to acquire more chips, which they would otherwise need to buy, thus meeting the state's definition of illegal online gambling.
Industry Reactions
The ruling has elicited varied reactions from industry stakeholders. Critics argue that virtual currency purchases do not equate to traditional gambling and should not be regulated as such. However, supporters of the ruling assert that it protects consumers from potentially predatory practices employed by some social gaming platforms.
The definitive ruling in this case highlights the ongoing tension between state regulations and the burgeoning online gaming industry. As states continue to grapple with defining and regulating online gambling, companies like High 5 Games may find themselves navigating increasingly complex legal landscapes.
The fallout from this case will likely resonate within the industry for some time, raising questions about the legality and ethics of virtual currencies and in-game purchases. As the digital gaming world evolves, so too will the laws that govern it, necessitating ongoing vigilance from both operators and consumers.