Software provider High 5 Games ordered to pay $25m to resolve social casino class action
On February 7, a class-action lawsuit was filed against High 5 Games, a North Carolina-based casino software provider working with Caesars Sportsbook & Casino, among others. A US court in Washington ruled the company must pay $25 million for unlawful gambling via its online casino-style games.
The lawsuit centered on social casinos, where players buy virtual chips to keep playing even while they cannot pay out their real money gains. The plaintiffs contended that the revenue model of High 5 Games amounted to gambling, since players needed to spend real money to keep playing.
According to Washington state law, wagering something of value on a game of chance is considered gambling. The court concurred that virtual chips had value by allowing for extended playtime, resulting in a ruling against High 5 Games.
Erik Gibbs, writing for Next.io, notes that the social gaming business may be impacted by the decision in this case. Social casinos have generated billions of dollars over the last decade, primarily from selling virtual money to gamers.
Although these games do not offer monetary payouts, they are popular because they replicate the experience of actual gambling. However, as more litigants argue that these games effectively constitute gambling under the law, many legal challenges have emerged.
Notable lawsuits challenging social casinos include a June 2023 case in which a U.S. judge approved a $415 million class-action settlement against DoubleDown Interactive LLC and International Game Technology PLC. This lawsuit claimed that the companies breached Washington state gambling laws by offering online casino-style games where players purchased virtual chips.
Additionally, Amazon is set to face trial in 2026 over allegations of promoting social casino apps that facilitate illegal online gambling, with the lawsuit contending that Amazon profited from these apps, which, while offering games that resemble gambling without monetary rewards, encourage in-app purchases.
