Australian slot machine giant Aristocrat Gaming announced to the ASX Tuesday that a US federal judge in Washington state has given final approval to a $31 million settlement of two class-action lawsuits related to its Big Fish social casino platform.
That’s good news for the plaintiffs in the suits, the small fry taking on the Big Fish. They’re former players of the social casino site who claimed that they were the victims of predatory illegal gambling games. It’s not so good for Big Fish’s current owner, Aristocrat. Nor for former Big Fish Games owner Churchill Downs, which is on the hook for around $124 million.
The $155 million figure at least will come as no surprise to the two companies, which reached an agreement in principle to settle in May last year. The final sign-off came two weeks ago from the US Federal District Court for the Western District of Washington.
Something of Value?
Aristocrat purchased Big Fish from Kentucky-based Churchill Downs in 2017 for $900 million, three years after Churchill had acquired the formerly independent games studio.
As part of the settlement, Seattle-based Big Fish agreed to establish a voluntary self-exclusion policy and to change the game’s mechanics so that players who run out of virtual chips can continue playing without having to buy more.
Both Aristocrat and Churchill continue to deny that the Big Fish platform ever broke Washington state gambling laws.
Crucially, Judge Milan D. Smith disagreed when he delivered his shock March 2018 ruling that the virtual play chips used in the games constituted “something of value,” despite their lack of direct monetary worth.
Shockwaves for Games Industry
Smith’s interpretation meant that the play-money games fell into the classification of gambling, which Washington state defines 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.”
All previous attempts to sue social games developers for offering “illegal gambling” had been laughed out of court.
Smith’s ruling had huge ramifications for the social games industry, and not just games that aped casino slots. Any game that included chance-based mechanics and in-game microtransactions could now be seen to violate the law.
That could prove to be a problem for a state like Washington with a thriving video games development sector. In fact, two Washington lawmakers have introduced a bill that seeks to safeguard the state’s 20-percent share of the global industry and protect it from future lawsuits.
State Rep. Zach Hudgins’s (D-11th) and State Sen. Mark Mullet’s (D-5th) legislation would modify state gambling law to exempt games where players do not cash out for real money.
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