In a landmark decision, a federal judge in Washington ruled against New York-based gaming firm, High 5 Games, declaring that two of its social casino apps, High 5 Casino and High 5 Vegas, are considered illegal gambling in the state. Comparatively, this legal determination poses major financial repercussions for the company.
On the 11th of June, Western Washington District Court Judge Tiffany Cartwright laid down a ruling that could potentially hold High 5 Games culpable for millions in damages. This liability stems from the stringent confines of Washington’s established Recovery of Money Lost at Gambling Act (RMLGA), a legislation that allows for the rectification of actual capital—not play money—lost in unlawful betting activities.
In agreeing with former player and lead plaintiff Rick Larsen, Judge Cartwright cemented the claim that activities on the apps violate the state’s established Consumer Protection Act (CPA) and the RMLGA alike. Larsen initiated this class-action lawsuit against High 5 Games in 2018, noting that the apps provided users with virtual coins free of charge when registering on various tech platforms such as Facebook, Google Play, and the App Store.
Players exhaust these virtual coins swiftly and to continue playing, they resort to purchasing additional coins with real currency. Larsen alone registered a spend of $7,470.50, as disclosed by court documents.
Under the shared claim of a class action lawsuit, any purchasers of the apps’ virtual currency residing in Washington could be eligible for damage compensation, as long as their purchase was made post-April 9, 2014.
The RMLGA pledges that all victims losing money or property of value in illegal gambling activities are entitled to recover the worth of their loss from the entity that benefited from the illicit activity.
Through subpoenas served to major tech entities like Amazon, Apple, Google, and Facebook, Larsen’s legal team unearthed that Washington residents had contributed more than $21.6 million to High 5’s apps between 2014 and 2023. Yet, Judge Cartwright did not endorse the exact figure as conclusive and declared that a jury should determine the damages following additional discovery.
Cartwright’s judgment was fueled by precedent. In March 2018, Milan D. Smith, a federal judge on the Ninth Circuit court of appeals, ruled that virtual play chips in another social casino app, Big Fish, could be seen as ‘something of value’ per Washington law. Such a determination is fundamental, as Washington characterizes gambling as risking an object of value on uncertain or uncontrollable future events to potentially gain another item of ‘value.’ This interpretation differentiates Washington from other states where similar lawsuits surfaced.
Victims in the Big Fish case ultimately collectively received a whopping $155 million. Cartwright deduced that High 5’s virtual coins functioned identically to those of Big Fish, indicating a potentially sizeable payout for aggrieved High 5 users.