Social Casino Games Platforms Agree $3.5M Class Action Settlement
Posted on: July 8, 2022, 11:35h.
Last updated on: July 8, 2022, 12:02h.
Three social casino platforms have agreed to pay $3.5 million to settle a class-action lawsuit that accused them of violating Washington State gambling laws. The defendants assert the settlement is not an admission of wrongdoing.
Grande Games, SpinX Games and Bole Technology, all Chinese companies, were sued by a former player, William Heathcote, in September 2020. The plaintiff sought reparation under Washington’s Recovery of Money Lost at Gambling Act, and also claimed violation of the Washington Consumer Protection Act and unjust enrichment.
While, the three companies’ platforms use in-game play-money currency, the lawsuit claimed players are encouraged to use real money to purchase more currency. It argued this made them predatory illegal gambling operators.
Big Fish Ruling
While similar lawsuits have generally been unsuccessful in other jurisdictions, Washington courts are fertile ground for plaintiffs bringing this kind of legal action against social games companies.
This has been the case since federal Judge Milan D. Smith delivered a surprise ruling in March 2018. Smith determined that the virtual chips in play on the Big Fish social casino platform constituted “something of value,” despite their lack of direct monetary worth.
That meant Big Fish’s play-money games fell into Washington State’s definition of gambling. That is defined as “risking something of value on the outcome of a contest of chance or a future contingent event not under the person’s control or influence to receive something of value in the event of a certain outcome.”
Smith’s ruling was bad news for the social games industry, and not just for platforms that aped casino-style games. Now it could be argued that any game that included chance-based mechanics and paid-for play money could violate the law.
Big Fish’s owner, Aristocrat Gaming, and former owner, Churchill Downs Inc., ultimately agreed to pay a total of $155 million to resolve the case.
The new settlement benefits Washington residents who played the games Cash Frenzy, Lotsa Slots, Jackpot World, Vegas Friends, Jackpot Mania, Jackpot Fever, DAFU, Cash Bash, and Jackpot Crush before Jan. 31, 2022, according to topclassactions.com.
Payouts will be based on the amount claimants spent on the gambling on the platforms, with those who spent more eligible for a higher proportional share.
In addition, the defendants have agreed to provide in-app self-service resources for those who might be struggling with video game behavior disorders. They will also implement in-game mechanics to deter unnecessary spending, while providing self-exclusion measures.