Verdict Ends High 5 Games' Operations in Washington
After a protracted six-year legal battle, High 5 Games faces a grim reality as two of its popular mobile applications have been deemed illegal in the state of Washington. High 5 Casino and High 5 Vegas have been classified as online gambling by Western Washington District Court Judge Tiffany Cartwright, directly violating state law.
Washington's Stance on Online Gambling
Washington's stringent regulations classify online gambling as any activity that requires users to stake something of value on the outcome of a game of chance or an event with a prize. This law causes many gaming operators, including those of social casino games, to avoid operating in the state. High 5 Games attempted to circumvent this by claiming their games operate using virtual coins, thus positioning their platform as a "social casino." However, Judge Cartwright’s ruling found that the virtual nature of the coins does not exempt the company from the state’s stringent gambling laws.
Legal Findings Against High 5’s Operations
In her comprehensive ruling, Judge Cartwright stated that High 5's games emulate traditional video slot machines found in physical casinos, constituting a form of gambling. As such, the games breach both the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act. Rick Larsen, a High 5 Games user, initially filed the lawsuit six years ago, leading to the intricate web of legal battles culminating in this verdict.
The court found that High 5 Games' business model promoted illegal gambling due to the monetization schemes involved. Players were required to purchase additional chips with real money to continue playing, notwithstanding the company’s argument that users are given free coins upon registration and periodically thereafter. Judge Cartwright highlighted that these free coins were insufficient for regular play, thereby compelling users to spend actual money to maintain participation in the games.
Virtual Currency and Washington Law
Washington law treats virtual currency as a "thing of value," despite its non-redeemability for cash. This interpretation broadens the scope of what the state considers gambling, putting pressure on gaming companies operating under similar models. High 5 Games’ contention that their coins were merely virtual and social did not hold water in the court’s assessment.
Implications and Future Actions
Following the unfavorable ruling, High 5 Games has stated that it has taken steps to cease operations in Washington. However, the company is now liable for damages to Rick Larsen and other plaintiffs, with the exact amount to be determined by a jury. SBC Americas has reached out to High 5 Games for a response, but no official statement has been received yet.
In addition to the High 5 case, Judge Robert Lasnik also ruled against DoubleDown Interactive and IGT in a separate case earlier this year, determining that these companies, too, had violated Washington's gambling laws. Similar to High 5, these companies' games were free to play but offered additional chips for purchase, leading consumers to bet to acquire more chips rather than buy them outright.
Ongoing Legal Matters
Another active but stalled lawsuit, Wilson vs. PTT, LLC, also involves High 5 Games, although it has seen little progress since early 2023. As these cases unfold, they pave the way for future interpretations of online gaming laws not just in Washington but across other jurisdictions facing similar legal challenges.
Conclusion
This landmark ruling against High 5 Games brings the complex landscape of digital gambling to the forefront. Washington’s stringent laws and the court’s unwavering stance highlight the inherent risks involved for companies operating within the state. As the gaming industry continues to evolve, this case serves as a critical reminder of the legal boundaries and the potential repercussions of crossing them.