A recent class action lawsuit was filed against High 5 Games by players in the state of Washington who alleged that they lost money while playing the games on High 5 casino. A previous court ruling has classified High 5's social casino games as illegal gambling under state law, and the evidence submitted in court has claimed that High 5 Games has targeted players who spend more - including those with gambling addictions.

In a historic ruling, a Washington state jury has ruled against High 5 Games, indicating the first class action verdict to win against a social casino operator. The jury awarded $24.9 million in damages to consumers in Washington who lost money while playing the company's online casino games. This verdict follows a prior court decision that classified High 5 Games' social casino products as illegal gambling under the law of Washington state.

Social casino model deemed illegal

Social casinos operate by offering digital casino-style games and slot machines where players may buy virtual chips using real money. Although these chips hold no cash value whatsoever, plaintiffs argued that they functioned as gambling bets as players had to purchase more chips to continue their gameplay. Last year, a court found that High 5's social casino model breached Washington state gambling laws.

The jury determined that the customers of High 5 in Washington had lost almost $18 million through its games. In addition to this amount, the jury awarded $7 million in statutory damages, bringing the total payout to nearly $25 million.

Targeting high-spending users

During the trial, evidence presented in court revealed that High 5 Games specifically targeted high-spending users, often referred to as 'whales.' The company allegedly provided free chips to entice these players to continue playing. One of the most alarming revelations was that a player who had requested their account to be closed because of gambling addiction was instead offered incentives to keep playing.

This approach, combined with the financial losses suffered by Washington players, played a crucial role in the jury's decision.

A crucial moment for the social casino industry

The verdict against High 5 Games comes on the heels of multiple settlements in similar cases, where social casino operators have collectively paid more than $650 million in compensation to affected players. However, unlike other companies that opted to settle, High 5 Games chose to fight the allegations in court, ultimately leading to this significant jury verdict.

The ruling is expected to influence current litigation against major tech companies, including Meta, Amazon, Apple, and Google. These corporations allegedly profit from these social casinos because they process payments and collect transaction fees, positioning themselves as financial intermediaries in the industry.

Todd Logan of Edelson PC, the law firm that represents the plaintiffs, emphasized the implications of the case, stating: "Big Tech isn't just standing by - they're cashing in. This verdict is a milestone, but it's only the beginning."

High 5 Games expands amid legal battles

Despite its legal challenges, High 5 Games has continued its expansion in the US online gaming market. In July of 2024, the company arrived in West Virginia, marking its fifth regulated market in the country. Its gaming portfolio includes popular titles such as Da Vinci DeluxeWays, Green Machine Deluxe, and 88 Drums.

The outcome of this case could have far-reaching consequences for the social casino industry and the tech giants that facilitate its operations. With regulators and legal experts closely watching, this ruling may serve as a reason for further action against social casino operators and the platforms that support them.

As more lawsuits emerge and legal scrutiny intensifies, the industry faces mounting pressure to reassess its business practices and regulatory compliance, particularly in states like Washington that have taken a firm stance against social casinos operating in a legally gray area.