Last Wednesday, Judge Milan D. Smith of the Ninth Circuit of the U.S. Court of Appeals overturned a 2015 district court ruling filed against then Big Fish Games’ parent company Churchill Downs Inc. by Cheryl Kater.
Kater’s lawsuit claimed that she bought and lost Big Fish Casino’s virtual chips worth over $1000. While the chips do not have any monetary value, players require them in order to play the online casino’s suite of games that includes roulette, slots and blackjack. Players who run out of these chips will either need to wait until the game offers or free chips or hasten things up by purchasing more. Cheryl Kater hoped to recover the lost chips arguing that the said chips represented “something of value” under the Washington Gambling Law. Her lawsuit was junked by a Seattle U.S. District Court judge.
Judge Smith, however, overturned the earlier ruling on March 25 on grounds that “the virtual chips extended the privilege of playing Big Fish Casino,” which implies that it fell under the Washington state law’s definition of “something of value.”
“Without virtual chips, a user is unable to play Big Fish Casino’s various games,” Judge Smith wrote in his opinion. “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.”
Based on this opinion and the definition of gambling according to Washington state law, the appeals court pointed out that Big Fish Casino constituted illegal online gambling.
A Wake-Up Call for Social Casinos
Online gambling is still deemed as an illegal activity in most U.S. states but operators such as the now Aristocrat-owned Big Fish Casino have been providing online gamblers in the country with legal alternatives. In the wake of this Court of Appeals ruling, it is possible that the spotlight might shift to other online gambling operators through similar lawsuits from displeased players – federal law gives anyone who loses “a thing of value” to an illegal gambling operations legal grounds to reclaim whatever they have lost.
Meanwhile, Cheryl Kater’s lawsuit will be returned to the Seattle district court where Big Fish Casino’s former owner, Churchill Downs, will be given another opportunity to argue the case.