The crux of the ruling centres on the use of virtual chips in casino games such as blackjack, roulette and slots. While the chips have no direct monetary value, players can only continue to play casino games on the site as long as they have virtual chips. Players can only re-enter the game if they have received free chips or choose to purchase more.
In 2015, Cheryl Kater filed a lawsuit against Big Fish Games previous owners, land based casino operator Churchill Downs, after spending more than $1,000 on Big Fish Casino virtual chips. In her lawsuit Kater argued that the chips represented “something of value” and as such their presence within the game was a direct contravention of a number of Washington state statutes, including the Recovery of Money Lost at Gambling Act (RMLGA) and the Washington Consumer Protection Act.
Later in 2016, a judge in Seattle’s US District Court dismissed this assertion prompting an appeal process which culminated in a stunning reversal.
Delivering his ruling Judge Milan D. Smith of the Ninth Circuit US Court of appeals said that “Without virtual chips, a user is unable to play Big Fish Casino’s various games.
“Thus, if a user runs out of virtual chips and wants to continue playing Big Fish Casino, she must buy more chips to have ‘the privilege of playing the game.’ Likewise, if a user wins chips, the user wins the privilege of playing Big Fish Casino without charge. In sum, these virtual chips extend the privilege of playing Big Fish Casino.”
Summing up, Judge Smith added: “We therefore reverse the district court and hold that because Big Fish Casino’s virtual chips are a ‘thing of value,’ Big Fish Casino constitutes illegal gambling under Washington law.”
At the same time, the court dismissed a secondary assertion that Big Fish Casino players are able to “cash out” on their virtual chips by agreeing to sell them for real money on a secondary market and then transferring them to other users. Judge Smith noted that these sorts of transactions are expressly prohibited by Big Fish Games.
No comment on the ruling has been made by either Big Fish Games or Churchill Downs, which could choose to again appeal this decision and try its luck in the courts.
