A federal jury has ruled against High 5 Games, ordering the social casino operator to pay $24.9 million in damages to Washington state players. The case is the first-ever class action verdict against a social casino company, setting a precedent in an industry already facing massive legal challenges.
Jury Finds Social Casino Model Violated Washington Gambling Laws
The lawsuit accused High 5 Games of running an illegal gambling operation under Washington state law. Players were required to buy virtual chips with real money to continue playing, despite the chips having no cash value.
Judge Tiffany Cartwright ruled in June 2024 that the company’s flagship apps, High 5 Casino and High 5 Vegas, violated Washington’s Consumer Protection Act (CPA) and the Recovery of Money Lost at Gambling Act (RMLGA). This opened the door for affected players to seek compensation.
Washington’s gambling laws stand apart from other states because they classify virtual casino chips as “something of value.” This classification was established in 2018 with the Big Fish Casino case, a decision that heavily influenced this ruling.
Players Lost Millions, Jury Awards Additional Damages
Court findings revealed that players in Washington lost nearly $18 million on High 5 Games’ platforms. The jury tacked on an additional $7 million in statutory damages, bringing the total payout to just under $25 million.
Key evidence showed that the company:
- Targeted high-spending users to maximize revenue.
- Encouraged a known gambling addict to continue playing.
- Designed its business model to resemble real-money gambling, despite no cash payouts.
This aggressive approach to monetization was central to the jury’s decision.
High 5 Games Refused to Settle—A Costly Decision
Unlike other social casino operators, High 5 Games chose to fight the lawsuit rather than settle. That gamble didn’t pay off.
Other companies in similar legal battles have settled for over $650 million combined instead of taking their chances in court. For example, Aristocrat Technologies and Churchill Downs paid $155 million in 2021 to settle a case over Big Fish Casino.
Had High 5 Games opted for a settlement, it might have avoided a public trial and the legal precedent that now looms over the industry.
Washington’s Unique Law Puts Social Casinos on Notice
High 5 Games’ defeat highlights Washington’s strict stance on social casinos. While virtual chips are worthless outside the game, the RMLGA allows players to recover money lost in illegal gambling.
Washington remains the only state in the U.S. that considers play-money casino chips equivalent to real gambling currency. This classification makes it easier for players to take legal action against social casino platforms.
Here’s how the law differs from other states:
| State | Virtual Chips Legality | Key Ruling |
|---|---|---|
| Washington | Considered “something of value” | 2018 Big Fish Casino case |
| California | Not classified as gambling | No major rulings |
| Nevada | Legal but regulated | Governed by casino laws |
| New York | No clear stance | No major rulings |
Given the legal landscape, more lawsuits could follow, as Washington-based players have a clear path to challenge similar business models.
What’s Next for Social Casinos?
This verdict could trigger a wave of lawsuits against other social casinos operating in Washington. If more courts follow suit, companies relying on in-game purchases for virtual chips may be forced to rethink their monetization strategies.
For now, High 5 Games faces a major financial hit and a potential reputational crisis. Whether it appeals the ruling or pays up remains to be seen.
Leave a Reply