International edition
October 23, 2020

Chips have no “value” and cannot be exchanged for cash or merchandise, Court claims

Washington Court says social casino games do not constitute gambling

Washington Court says social casino games do not constitute gambling
A Federal Court in Washington state dismissed a Plaintiff’s class action claims that social casino games using purchasable virtual casino chips constitute gambling under Washington state law. The Court found that the virtual chips have no “value” an
United States | 11/26/2015

A Federal Court in Washington state dismissed a Plaintiff’s class action claims that social casino games using purchasable virtual casino chips constitute gambling under Washington state law. The Court found that the virtual chips have no “value” and therefore the game did not constitute gambling because Plaintiff was not “staking or risking something of value.”

T

he Court disagreed with Plaintiff’s allegations that the virtual chips had value because they allow users to “extend gameplay” and can be sold in a secondary market. The Court noted that the games are free to play and there is never a possibility of receiving real cash or merchandise, and that extended gameplay cannot result in any gain to the user aside from the amusement that accompanies it. In so deciding, the court distinguished cases where extended play in the form of free games were actually redeemed for cash. Regarding the secondary market, the Court pointed to the Terms of Service, which stated that “the virtual chips have no cash value, and cannot be exchanged for cash or merchandise.” The Court noted that allowing users to sue the Defendant for damages based on their own breach of contract would be contrary to basic principles of law and equity.

This is another significant win for social game companies on a fundamental business practice – the ability to sell virtual goods for use in gamblification (i.e. the use of gambling mechanics for non-gambling purposes). 

 

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