Federal court in Washington State dismisses claim against a social casino
The lack of a value prize in a social casino game meant that the action did not constitute gambling, a federal court ruled last November, according to a report just published in the National Law Review.
The report concerns a class action seeking recovery of monies paid to a social casino game provider on the grounds that the monies were lost to an "illegal gambling operation."
The court determined that the complaint did not state a plausible claim for relief because the provider did not award something of value (requisite prize element under definition of gambling), and therefore, the game was not "illegal gambling" under Washington law, the National Law Review recounts.
Because all of the plaintiffs' claims were contingent on a finding of illegal gambling, the court dismissed the entire complaint, reinforcing the legality of monetising social casino games, as long as certain criteria are met.
The class action suit claimed that under Washington state law, social casino games using purchasable virtual casino chips constituted illegal gambling. Therefore, the claimants argued, under Washington's "Recovery of Money Lost at Gambling Act" they should be allowed to recover the "amount of the money or the value of the thing lost" in the defendant's illegal gambling operation.
The following facts were undisputed: The defendant ran a virtual game platform that was downloaded free of charge. Once downloaded, users were credited a certain number of virtual casino chips for free, which they could use to play games (blackjack, roulette, etc.).
Users could obtain additional chips by winning games (free), waiting until additional chips were awarded to them (free), or by purchasing additional chips or other virtual items to enhance or extend gameplay. Additionally, the defendant's terms of use stated that the chips had no cash value, and could not be exchanged for cash or merchandise, either with the operator or other users.
The court held that the requisite prize element had not been proved, rendering the claim of illegal gambling – and therefore the plaintiff's case – redundant. The court opined that the games and virtual chips did not constitute "something of value" because: (1) any extension of play awarded could never result in the award of cash or merchandise, and (2) even if there was a secondary market in which users bought or sold chips, their actions expressly violated the terms of use for the games.
The plaintiffs have appealed the decision, the National Law Review reports, but notes that in a separate action the Washington State Gambling Commission came to the same conclusion as the federal court.
http://www.natlawreview.com/article/washington-federal-court-finds-social-casino-games-not-gambling#sthash.AHCG3hW8.dpuf
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