Another class action against a social gaming firm

News on 19 May 2018

Another social casino gaming class action has been launched in Tacoma, Washington State, with the Game Show Network the latest target of the same legal firm that has been launching class actions against similar operations in the state.

GSN offer free-to-play casino games in which virtual tokens are used, issued as rewards by the operator or purchased for real cash by the player.

The latest class action has plaintiff Elise Bell at its centre, who claims that she lost $700 paid for virtual tokens in playing the GSN casino games. She claims that GSN is conducting illegal online gambling in terms of the state constitution, and is represented by the law firm Tousley Brain Stephens.

That name is possibly familiar to Our readers, associated as it is with similar cases launched against Huuuge Games, DoubleDown Interactive, High 5 Games, Scientific Games and Playtika.

The lawsuits allege that the virtual tokens rewarded to or purchased by players represent “something of value,” a phrase which the litigants claim places the social gaming activity within the definition of gambling in Washington state.

In the Bell filing, the litigant argues:

“Defendant’s online gambling games are illegal gambling games because they are online games at which players wager things of value (the tokens) and by an element of chance (e.g., by spinning an online slot machine) are able to obtain additional entertainment and extend gameplay (by winning additional tokens).”

The possibilities of success for the plaintiffs have been strengthened by a recent federal appeals court ruling which went against Big Fish Games and its corporate parent Churchill Downs Inc. (see previous reports).

In that case Judge Milan D. Smith of the Ninth Circuit of U.S. Court of Appeals found that “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.”

Churchill Downs Inc has petitioned for a review of the judgement, and the case is therefore still ongoing.

Social gaming apps typically use in-app token purchases to generate revenue on “free” games, but the lawsuit against GSN claims the psychological effects of these transactions is similar to that  experienced in casinos.

“The similarity between micro-transaction based games of chance and games of chance found in casinos has caused governments across the world to intervene to limit their availability. Unfortunately, such games have eluded regulation in the United States. As a result … Defendant’s online gambling games have thrived and thousands of consumers have spent millions of dollars unwittingly playing Defendant’s unlawful games of chance,” the Bell filing claims.

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