After a protracted legal battle, a landmark ruling by the Western Washington District Court has determined that two mobile apps offered by High 5 Games (H5G) are illegal in Washington state. This decision, handed down by Judge Tiffany Cartwright, categorically states that High 5 Casino and High 5 Vegas constitute online gambling—a practice that is prohibited in Washington.
The Legal Context
In Washington, online gambling is defined as any activity that requires users to stake value on the outcome of a game of chance or an event that offers a prize for a specific outcome. As a result, many gaming operators, even those that consider themselves "social" platforms, avoid operating in the state.
H5G argued that its applications used virtual coins and operated as a “social casino.” However, Judge Cartwright ruled that the games emulated video slot machines found in physical casinos. According to Cartwright, this made them illegal under the Washington Consumer Protection Act and the Recovery of Money Lost at Gambling Act.
Player Claims and Company Defense
The lawsuit, which was initially filed six years ago by High 5 Games player Rick Larsen, stated that the apps promoted illegal gambling. The apps required players to purchase additional chips using real money to continue playing, despite offering free coins upon registration and periodic awards.
H5G countered this by stating that players could continue to play using the free coins provided. However, the court found that users couldn’t play with regularity unless they were willing to spend money on these virtual chips. Under Washington law, virtual currency is recognized as a “thing of value,” even if it cannot be redeemed for cash.
Judge Cartwright's ruling obligates H5G to compensate Larsen and other plaintiffs, with the amount of damages to be determined by a jury at a later date.
Industry Impact
This ruling sends a strong message to other online gaming operators. Washington’s strict gambling laws have precedent as Judge Robert Lasnik also found that DoubleDown Interactive and IGT violated state gambling laws earlier. Similar to High 5 Games, these companies offer games that are free to play but allow users to purchase additional chips with real money. This decision exemplifies the rigidity with which Washington enforces its gambling laws, emphasizing that even the use of virtual currency can constitute gambling under state law.
H5G has publically acknowledged the decision and mentioned efforts to cease its operations in Washington. However, SBC Americas has yet to receive an official response from High 5 Games regarding the recent verdict.
Ongoing Legal Battles
While the Larsen case has reached a conclusion, H5G continues to face legal challenges. A separate case, Wilson vs. PTT, LLC, remains active but has seen no significant developments since early 2023. The focus of the ongoing legal scrutiny indicates that the repercussions for H5G and similar operators are far from over.
In summation, Judge Tiffany Cartwright's ruling marks a significant moment in the regulation of online gambling. The decision underscores Washington state’s stringent laws against online gambling and establishes a clear precedent for other operators considering entering the market. As the legal landscape continues to evolve, it remains crucial for gaming companies to stay vigilant and compliant with state laws to avoid similar legal pitfalls.
“The undisputed material facts as to liability show that High 5’s games violate Washington’s gambling laws and the Consumer Protection Act,” wrote Judge Cartwright in her critical summary of the case. This statement succinctly captures the gravity and clarity with which the court approached the high-profile legal challenge, setting a definitive tone for future cases in the state.