Wild case of so-called illegal gambling costs Australian slots maker Aristocrat $31 million.
Every sound-minded adult from here to Timbuktu understands the concept of gambling. Whether you actually partake in the pastime or not, we all know that the basic definition of gambling. It is risking something of value for a chance of winning something of equal or greater value. That didn’t stop some money hungry social gamers from taking advantage of Australia’s largest manufacturer of physical and digital slot machines.
After two years of arguing a perfectly conceivable point, Aristocrat has thrown in the towel. The company has agreed to pay a class action settlement of US$31 million (AU$47 million). Their co-defendant in the case, Churchill Downs, was equally fed up with the nonsensical lawsuit, willing to pay US$155 million (AU$237 million) to call it done.
Wild Case of So-Called Illegal Gambling Ends in Settlement
The issue dates back to 2015, when a woman filed a complaint against social casino gaming giant, Big Fish Games. She argued that she had lost $1,000 worth of virtual chips playing games in the mobile app.
Mind you, these were “social casino games”. Social gaming means you can not ever win money or cash out chips for anything of value. Users can spend money to purchase additional chips, should they choose to do so, but there is no requirement to spend money, and no real money can ever be won or redeemed for playing. That message is clearly stated in the terms.
So, getting back to the story… Three years later, in 2018, the Ninth Circuit U.S. Court of Appeals ruled that the social casino games provided by mobile gaming giant, Big Fish Games, constituted illegal gambling. It was the court’s opinion that, according to Washington State law, virtual chips did constitute a “thing of value”, and that the games constituted a “contest of chance”, and that—despite the lack of a monetary return for winning—those virtual chips were exchangeable for “the extension of a service, entertainment, or a privilege of playing a game or scheme without charge.”
Aristocrat & Churchill Downs Role in the Events
Where does the combined settlement of Aristocrat and Churchill Downs come into play? When the case was filed in 2015, Churchill Downs owned Big Fish Games. However, in late 2017, the mobile gaming application was sold to Aristocrat for US$990 million. Essentially, the Australian gaming group purchased stock in that lawsuit. No one expected it to end in anything but dissolution, yet, low and behold, the U.S. Court decided social casinos are, indeed, illegal gambling, in the state of Washington.
The combined settlements will return the monies lost on Big Fish Games to those qualifying in the class action.
On a Side Note…
Now that the case is done and over with, I – and I’m sure many of you out there, as well – would love to arrange a brief meeting with the judge, plaintiffs, and supporters in this case. I have a stretch of beautiful, ocean-front property on the sunny shores of Arizona I’m selling for bottom dollar! My name is Helen Bach, email me if you’re interested, email@example.com.