Social Casino deemed illegal in the US

Posted by Gerry Poltorak on Apr 11, 2018 Posted in Poker Industry News | No Comments »

March 28th, 2018 saw the United States Court of Appeal for the Ninth Circuit issued a ruling against Churchill Down. This is the former owner of Big Fish Casino which is a social gaming operator. This new decision has proven that social casinos are now illegal under the laws of the State of Washington. This is something that will also affect other organizations using the model of selling virtual or play chips for real money.

The case

In 2013, Cheryl Kater who is a resident of Washington registered an account with Big Fish Casino and lost in excess of $1,000 worth of chips when playing the games. This prompted her to sue the entity in 2015 for her to regain her funds under a Washington statute that allows losers to regain their money from illegal gambling operations.

This case was heard by a lower court and it threw out the case stating that the virtual chips dispensed by Big Fish Casino were not of value and the operations by the casino could not be deemed as illegal. Kater appealed this ruling and this was reversed by the recent opinion of the court which stated that virtual casino chips are included under the illustration of things of value.

This case was revisited by Judge Milan D. Smith who reversed this earlier ruling stating that the virtual chips extended the privilege to play big Fish Casino which meant that these chips would be classified as things of value. According to the Washington State Law, gambling is taken as the risking or staking something of value upon the outcome of a contest of chance or a future contingent event not under the person’s control, upon agreement or understanding that the person or someone else will get in return something of value in the event or a given outcome.

According to Smith, without the virtual chips, one is unable to play Big Fish Casino and for them to continue playing they are required to purchase the virtual chips. This means that these chips can be classified as things of value. When you win in this game, it means that the player will have the privilege of playing the game without having to purchase the chips.

From Judge Smith’s ruling, it is clear that Cheryl Kater has the liberty to continue with her lawsuit in pursuit to recover the value of her virtual chips she lost from Churchill Downs. This is a class action lawsuit and the final disposition might include plenty of hundreds or thousands of people in this class. This means that Churchill Downs might end up settling the lawsuit with a huge amount of money.

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