Washington AG Files Lawsuit, Wants to Ban Social Online Casinos

Washington is continuing its pursuit of gaming reforms, and this time, social online casinos could feel the effects.

Attorney general Nick Brown asked a King County judge to order the shut-down of 16 casino-style mobile apps that allowed customers to spend money while playing gamers. Additionally, Brown is hoping to recoup more than $225 million that residents spent on virtual coins and credits.

The case could have landmark repercussions, as the legitimacy of social casinos continues to be tested nationwide.

The crux of the issue

A lawsuit submitted by the AG’s office named Playtika, Aristocrat, and affiliated companies within the gaming industry. 

According to the complaint, more than 150,000 Washington players accessed these platforms on a monthly basis. They also made more than eight million purchases worth over $151 million on Playtika-developed apps, plus an additional 2.3 million purchases worth at least $74 million on Aristocrat apps. These numbers date back nearly six years to Sept. 2020.

Platforms in question allowed customers to play virtual slot machines, poker, bingo, and other common games associated with gambling. Players do not need to pay to access the free-to-download platforms and do not use cash to play games; instead, they pay for virtual coins, which are then used to unlock games and opportunities.

The developer companies do not allow virtual coins to be translated directly into cash, and instead reward customers with prizes, gift cards, and more coins and opportunities in the app. This so-called dual-currency model is largely responsible for disagreement related to social casinos, which insist that they should not be subjected to the same regulations as typical online casinos.

The fate of these gaming platforms will ultimately depend on how the Washington judge defines a “thing of value,” which is a crucial term in the state’s lawbook.

The arguments

The definition of a “thing of value” can be broadened to represent “a privilege of playing at a game or scheme without charge.”

AG Brown argued that virtual winnings — including coins offered by social casinos — represent “value” since these coins can be used to make more bets, with winnings also unlocking various real-life prizes. 

A previous court decision left Washington to define the chain of events at an online platform as the following: players purchase virtual currency, use that to wager on a particular outcome, and win or lose virtual currency depending on the outcome. If the judge defines virtual currency offered by social casino games as a thing of value, AG Brown would have a strong case.

Beyond the legality of their operations, the lawsuit also accused these gaming platforms of knowingly causing financial and emotional harm. Players supposedly revealed they were battling debt, depression, and damaged relationships, but couldn’t bring themselves to stop gambling.

Additionally, the state said that these platforms did not require users to share age-identification information, thereby opening the door to underage gambling.

Playtika already filed a motion to dismiss the case. They cited the Washington State Gambling Commission in the motion, specifically a 2014 brochure that said “No Prize = No Gambling = OK To Play.”

The motion was designated for an argument in a King County courtroom next month. A full resolution is not expected any time soon.