In the absence of a stake and the chance of a monetary return, online social games using purchasable virtual chips or coins are not gambling, ruled a Washington federal court.
A plaintiff’s class action claimed that under Washington state law, social casino games using purchasable virtual casino chips constitute gambling as it allows users to “extend gameplay” and can be sold in a secondary market. However the federal court disagreed with the allegations and said that the games are free to play and do give any prizes aside from the amusement the games provide the players.
The court added that even though the virtual chips can be sold on secondary markets, the terms of service of the game clearly stated that “the virtual chips have no cash value, and cannot be exchanged for cash or merchandise.”
The court’s decision is in line with a Washington State Gaming Commission (WGC) ruling, which stated that social games are not gambling because players cannot win money or a tangible reward. WGC explained on its website that if one out of three elements of gambling—prize, consideration (something of value, wager, fee to play), and chance—is removed, the game is not gambling. To keep online social games legal, there should be a way to play them for free and if “real” money can be used to enhance or extend the play, there must be no prize, WGC added.
In Maryland, a similar claim was filed against a social gaming company, which operates an empire-building strategy game. The game offered virtual coins for real money, which can be used to enhance games or play casino games within the game. The plaintiff said that she lost more than $100 wagering at the casino games, but the court granted the defendant’s motion to dismiss the class action as the game does not offer a mechanism for players to cash-out the gold or virtual goods for real money.
