High 5 Games Ordered to Pay $25 Million Over Illegal Gambling Claims
In a significant legal development, High 5 Games has been ordered to pay $25 million to plaintiffs who accused the company of facilitating illegal gambling activities in Washington state. This ruling is part of a broader movement against social casino gaming in the United States, a sector that has increasingly come under scrutiny from regulators and lawmakers alike.
The Complaint Sought Damages
The class action lawsuit was initiated by former customers of High 5 Games, who argued that the operator’s online social casino offerings amounted to illegal gambling, violating Washington’s gambling laws. The crux of the complaint centered on the nature of the games offered by High 5 Games, which included various games of chance that allowed players to stake virtual currency.
While players could not win real, withdrawable money, the plaintiffs contended that the requirement to purchase additional digital tokens to continue playing effectively meant they were staking real money. This argument was bolstered by a previous court ruling that had already classified similar products as gambling. Ultimately, the court sided with the plaintiffs, leading to the substantial damages awarded to the players.
High 5 Games Has to Return Millions of Dollars
The financial implications of this ruling are staggering. The class action was spearheaded by high-rollers who had collectively lost around $18 million after being lured in by various promotions and free chip offerings. One plaintiff recounted a troubling experience where he requested to close his account to mitigate his gambling addiction, only to be met with promotional offers encouraging him to keep playing.
Under the court’s ruling, High 5 Games is mandated to return $24.9 million to players in Washington. This figure includes the $18 million lost by players, along with nearly $7 million in additional damages. The law firm representing the plaintiffs, Edelson PC, expressed satisfaction with the outcome, with representative Todd Logan labeling it a milestone in the fight against unregulated gaming. He cautioned tech companies that this legal action is "only the beginning," signaling a potential wave of similar lawsuits in the future.
The U.S. Is Fighting the Social Casino Sector
The ruling against High 5 Games is emblematic of a larger trend in the U.S. gaming industry, where stakeholders are increasingly focused on curbing unlicensed gaming operators that threaten the integrity of the regulated market. Social casinos, particularly those operating under a sweepstakes model, are facing heightened scrutiny from regulators who are keen to eliminate this unregulated vertical.
In Maryland, for instance, lawmakers have proposed tougher regulations aimed at sweepstakes casinos, signaling a commitment to enforcing state gaming laws more rigorously. Similarly, West Virginia is preparing to take legal action against sweepstakes operators that target its residents, further illustrating the growing pushback against unregulated gaming.
Interestingly, while many states are moving to ban sweepstakes gaming, New Jersey has taken a different approach. The state has become the first in the U.S. to propose a regulatory framework that would allow for the taxation and regulation of social casino companies, rather than outright banning them. This could pave the way for a more structured and potentially safer environment for players, while also generating tax revenue for the state.
The Future of Social Casino Gaming
As the legal landscape surrounding social casino gaming continues to evolve, the outcome of the High 5 Games case may set a precedent for future litigation. With increasing awareness and concern over the potential for gambling addiction and the legality of social casino operations, it is likely that more players will come forward with similar complaints.
The ongoing battle between regulators and social casino operators highlights the complexities of the gaming industry in the digital age. As technology advances and gaming becomes more accessible, the need for clear regulations and responsible gaming practices becomes ever more critical. The High 5 Games case serves as a reminder of the challenges that lie ahead for both operators and regulators in navigating this rapidly changing landscape.