A similar lawsuit version Trion Woods’ ArchAge MMORPG is taking place in California.
US Federal appellate Judge Milan D. Smith ruled that Big Fish Games’s interactive social games were “illegal online gambling”. The decision overturned a 2015 ruling of a case in the State of Washington.
Big Fish Casino allows players to play online slots, roulette, and blackjack. While players cannot win real money, they can buy chips to facilitate play. Judge Smith ruled on an appeal of a lawsuit filed by Cheryl Kater against the parent company of Big Fish Games at the time, Churchill Downs Inc.
Churchill Downs bought Big Fish Games for $885 million in November 2014, then sold the social games company to Aristocrat Leisure for $900 million in November 2017.
This week’s ruling could affect the value of Aristocrat’s purchase.
Cheryl Kater’s Lawsuit
In her original lawsuit, Cheryl Kater claimed the $1,000 in chips she lost at Big Fish Casino’s social gaming website was a “thing of value”, which is how Washington State Law defines gambling. While the virtual chips have no monetary value, players who run out of chips either have to wait for more or buy additional chips.
The key passage of Washington’s state law on gambling states: “The staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person’s control or influence, upon an agreement or understanding that the person or someone else will receive something of value in the event of a certain outcome.”
Milan Smith on Buying Virtual Chips
Cheryl Kater had her suit thrown out by a US District Court judge in 2015, but appealed the ruling to Milan Smith’s court. Kater wants the value of the chips she bought returned to her.
In his ruling, Judge Smith wrote, “The virtual chips extended the privilege of playing Big Fish Casino,” which he determined met Washington’s description of a “thing of value”.
Big Fish Games Lawsuit
Judge Smith wrote, “Without virtual chips, a user is unable to play Big Fish Casino’s various games, Thus, if a user runs out of virtual chips and wants to continue playing Big Fish Casino, she must buy more chips to have ‘the privilege of playing the game.'”
“Likewise, if a user wins chips, the user wins the privilege of playing Big Fish Casino without charge. In sum, these virtual chips extend the privilege of playing Big Fish Casino.”
It is an expansive definition of gambling, because it appears to suggest that ‘the privilege of playing’ is something which can be gambled. Also, it suggest that one’s time is something which can be gambled, because a player only has to wait in order to have their chips replenished — without the need of buying virtual chips.
Big Fish Casino’s Virtual Currency
Big Fish Casino’s situation has some vague similarities to the questions over loot boxes or loot crates at the moment. In games with in-game purchases, a player can spend time on the game unlocking loot or can dispense with that step by buying in-game loot with real money. Big Fish Games does not have the randomness and volatility which offends so many critics about loot crates, though — players get what is advertised.
Churchill Downs Inc., the former owner of Big Fish Casino, has the right to appeal the decision in a federal appellate court. Also, CDI has the right to appeal the case directly to the US Supreme Court. The case might involve only $1000, but if CDI loses the Cheryl Kater case, then it opens the door for countless other Big Fish Casino players to sue.
Free-to-Play Gaming Site Lawsuits?
The case has wider implications even than that. If the Big Fish Games lawsuit stands, it could open up other social gaming networks to lawsuits by disgruntled players. Any site which offers real money pay for virtual chips could be a target for a legal challenge.
Judge Milan Smith noted that every state has different online gaming laws. For that reason, not every state would sustain a legal challenge against free-to-play gaming sites. Smith noted that the Big Fish Casino case “turns on Washington statutory law, particularly its broad definition of ‘thing of value,’ so these out of state cases are unpersuasive.”
Trion Woods Lawsuit
Once example is a California lawsuit involving the MMORPG, ArcheAge. Venkat Balasubramani, an attorney at Focal PLLC, whose firm is representing California gamers in a similar lawsuit against Trion Woods (designer of ArcheAge), said of the decision, “It sounds like an emphatic win for the plaintiff, and it is a clear win, but at the same time it’s just based on the allegations of the complaint which Big Fish has an opportunity to rebut.”
