Stunning decision: social casinos categorized as unlawful gaming
In a recent court ruling, some social casino games in the US state of Washington have been deemed illegal gambling. Companies like Big Fish and PokerStars are responding with concern and are pulling out of the market as a precautionary measure. Are these businesses in danger?
The term "social casino" refers to versions of casino games like slots and poker that use play money. These games gained popularity primarily through social networks, which included them in their gaming collections. These "social casinos" have proven to be highly profitable, with providers making money mainly from selling virtual chips, which are needed for stakes. While you are often given a limited amount of chips for free and can win some in-game, it's likely that these will eventually run out.
Up until now, these games have not been classified as gambling because they didn't explicitly promise a monetary prize. Typically, chips can't be exchanged for real money or prizes; they are just used to keep playing. However, under Washington state law, a prize doesn't need to have a specific monetary value to be considered "something of value."
Do virtual chips have any worth?
The idea that virtual gaming chips are "something of value" has been repeatedly disputed. In 2015, Cheryl Kater from Washington sued the parent company of Big Fish Casino, Churchill Downs, claiming unlawful enrichment through illegal gambling - Kater had spent around $1,000 on virtual chips and wanted her money back. The district court initially dismissed Kater's claim.
But on March 28 of this year, the Court of Appeal reversed that decision. According to the judges, gaming chips allow players to continue using the service, which counts as a "value" under the law. This qualifies as gambling, which is thus unauthorized: The chance to obtain a value by placing a bet. Cheryl Kater was therefore entitled to reimbursement of her losses.
Does this mean that social casino gaming will soon vanish? Is it considered gambling? This assessment is too hasty at this time; the defendant company, Churchill Downs, can still present its case before the original district court or choose to take it to the Supreme Court to review the ruling. However, other lawsuits against social casino operators (Huuuge Games, DoubleDown Interactive, High 5 Games, and Playtika) have already been filed. There's a high likelihood of a ban on these offerings, especially in US states that interpret "something of value" similarly to Washington. Past rulings, known as "precedents," hold significant weight in the US legal system. Other courts might use the decisions from Washington to make similar rulings.
For the companies, there's a risk of being linked to illegal gambling and potential penalties. Paying tens of thousands of dissatisfied customers may also be a possibility. Some operating companies, like PokerStars and Big Fish Casino, are already blocking internet users from Washington from their services as a precautionary measure. The rapidly growing market of social casinos may be facing a significant challenge.
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Source: www.onlinecasinosdeutschland.com
