High 5 Games ordered to pay $25M in landmark social casino class action

A U.S. federal jury has ordered High 5 Games to pay $24.9 million in damages to players in Washington state after ruling that the company’s social casino games violated state gambling laws.  

The case marks the first-ever class action verdict against a social casino operator and follows previous industry settlements exceeding $650 million.  

The lawsuit alleged that High 5 Games’ social casino model constituted illegal gambling, as players were required to purchase virtual chips with real money to continue playing.  

Judge Tiffany Cartwright ruled in June 2024 that High 5 Games' apps, High 5 Casino and High 5 Vegas, breached Washington’s Consumer Protection Act (CPA) and the Recovery of Money Lost at Gambling Act (RMLGA).  

The RMLGA allows individuals to recover money lost on illegal gambling games, effectively opening the door for affected players to seek damages.  

According to court findings, High 5 Games’ customers in Washington lost nearly $18 million while playing its social casino games. The jury also awarded an additional $7 million in statutory damages, bringing the total payout to $24.9 million.  

Key evidence during the trial indicated that High 5 Games specifically targeted high-spending users and even incentivized a player struggling with gambling addiction to continue playing.  

High 5 Games' business model revolves around offering free virtual coins upon registration via platforms like Facebook, Google Play, and the App Store. However, once players run out of chips, they must purchase more with real money to keep playing.  

Although the chips cannot be cashed out, the court ruled they function like real casino chips because they are essential to gameplay.  

Washington is the only U.S. state that classifies play-money casino chips as “something of value”, following a 2018 appellate ruling in the Big Fish Casino case. That decision set a legal precedent, which Judge Cartwright cited in her ruling.  

Unlike other social casino operators, High 5 Games took the case to trial rather than settling. Other companies have paid over $650 million in similar lawsuits without going to court.  

The verdict could have implications for Big Tech companies like Amazon, Meta, Google, and Apple, which process payments and take a cut of each transaction in social casino games.  

Todd Logan, a partner at Edelson PC, the law firm representing the plaintiffs, suggested this ruling could be the first of many: “Big Tech is cashing in on the market, and this verdict is just the beginning.”