Online social casinos that sell free chips may have to re-tool their policies because of a class-action settlement that awards $155 million to players of Big Fish Games. Big Fish allowed players to purchase free chips to play their games. The players sued, claiming they were victims of predatory illegal games.
The settlement announced in March 2021 is the result of lawsuits filed by players against Aristocrat Gaming and Churchill Downs, Inc., owners of Big Fish casinos. Some cases date back to 2015.
- Big Fish casino players to get $155 million.
- The lawsuit claimed the free-chips gambling system was illegal.
- The ruling will affect the policies of online social casinos.
Players’ Lawsuit Led to Big Fish Settlement
Cheryl Kater first sued Churchill Downs in 2015, claiming she had lost $1,000 playing Big Fish games from her mobile phone. She argued that the social games site was using games of chance, which violates Washington state law.
When Aristocrat bought Big Fish from Churchill Downs in 2017, they also became defendants in what had become a class-action suit. One of the parties argued:
By operating Big Fish Casino and other similar online gambling games, Defendants have violated Washington law and illegally profited from tens of thousands of consumers.
Did Big Fish Break Washington State Gambling Laws?
Both Churchill and later Aristocrat denied they had violated any laws, and a lower court initially dismissed the case. After an appeal, however, a federal judge ruled in 2018 that per Washington law, the play chips in the Big Fish games constituted “something of value.”
That put the games into the classification of gambling, which is banned in the state. It also set the case on course for the settlement. The parties agreed to settle last year, and the final sign-off came earlier this year.
The Games Violated Washington Laws
Judge Milan Smith’s 2018 ruling was the defining decision in the case. He reasoned that even though the Big Fish virtual chips were considered free-play chips, purchasing them to start or continue play at the site gave the chips value.
Washington state law describes gambling as “risking something of value on the outcome of a contest of chance or a future contingent event not under the person’s control or influence to receive something of value in the event of a certain outcome.” Stating that owners made millions of dollars off of Big Fish Casino, Judge Smith determined the following:
Because Big Fish Casino’s virtual chips are a ‘thing of value,’ Big Fish Casino constitutes illegal gambling under Washington law.Judge Milan Smith
Implications for the Online Gambling and Games Industry
While the direct result of the settlement means that Big Fish players will get their money back, Smith’s ruling may have more implications for the online gambling industry. Social gambling sites that have in-game microtransactions could be illegal in states where gambling is outlawed.
Big Fish has already agreed to employ a voluntary self-exclusion policy and adjust their games to allow players to continue free play without buying more chips. PokerStars suspended service for its play-money products to players in Washington.
Social Games & Legal Gambling
Video game developers in states where gambling is prohibited may have to tweak the mechanics of their games or seek protection under the new legislation.
Real money online casinos and gaming sites may have to change their marketing strategy for some states that prohibit gambling marketing and promotion. The ruling could even affect laws in states where gambling is legal.
The Future of Social Game Platforms in the US
The Big Fish settlement has caused social gaming sites based in the US to sit up and take notice. The chances of similar lawsuits with big payouts will spur them to change their policies on free play, which means profits will have to come from elsewhere. Players at these sites may see membership fees and more ads.
Whether or not the action will curtail the presence of these sites remains to be seen. But as more US states accept online casinos, the states and operators of sites that offer free play will be alert to how they are promoted.