Washington District Court Rules Against “Social Casino” Operator

After six years of litigation, the Western District Court of Washington resolved key issues in the case of Larsen v. PTT, LLC, finding on cross motions for summary judgment that the Plaintiff, as class representative, demonstrated that the games at issue violated Washington’s gambling laws and Consumer Protection Act. The court denied summary judgment on the amount of damages at issue and requested additional briefing rather than ruling on a request for permanent injunction.

The court determined that the games at issue, operated under the High 5 banner, constituted illegal gambling regardless of the facts that the virtual currency used to play the games was not redeemable for real world money and that the currency could technically be earned, in small amounts, without a player having to make a purchase. Recognizing that Washington law recognizes virtual currency as a “thing of value,” even if it is non-redeemable and holding that the High 5 games operate otherwise exactly like a traditional slot machine, the court applied the principals of the Kater case to find that the social casino games constituted illegal gambling and as such, were also an unfair or deceptive business practice under Washington law.

As such, Washington remains a favorable state for actions of this type, and hostile to virtual casino operators. High 5 alleges that it no longer operates within Washington through a combination of player disclosure and geolocation.