A federal judge has dismissed a class action suit brought against DoubleDown Interactive, the social casino division of gaming device maker International Game Technology (IGT).
Last April, Illinois resident Margo Philips filed a class action suit against the gaming operator, accusing DoubleDown Casino’s games of being “nothing more than camouflaged unlawful games of chance.”
Philips said she’d lost over $1k of real money gambling with virtual chips she purchased on DoubleDown over a two-year period. Philips further claimed that DoubleDown had “illegally profited” from the “thousands” of other Illinois residents that Philips claimed had each lost at least $50 via the social casino site.
Philips sued to recover both her own losses as well as all these other social gamers’ losses using the Illinois Loss Recovery Act (ILRA), one of those daffy nineteenth century statutes that allows individuals to sue for recovery of “illegal gambling” losses, including losses by third parties.
On March 25, Judge Edmond Chang dismissed Phliips’ case, in part because the ILRA requires there to be both a winner and a loser from the outcome of an illegal gambling contest. Since a person who purchases virtual chips from DoubleDown cannot cash those chips in for real money, there is no way for DoubleDown to ‘lose’ the chips it has sold.
As a result, the only risk DoubleDown faced from Philips losing her virtual chips via game play was the possibility that she might not opt to purchase more virtual chips. Chang noted that “risking potential future sales is not the same thing” as the casino putting its own money on the line via the outcome of a virtual slot machine spin.
However, Chang did quibble with DoubleDown’s argument that it should be exempt from prosecution under the ILRA because its online games were “materially different” from their land-based counterparts and therefore didn’t qualify as gambling devices. Chang noted that while the internet was not a “tangible device,” it was also “not some amorphous thing, and DoubleDown’s app can qualify as a ‘device’ used for gambling.”
This is the second time this year that courts have dismissed efforts to use the ILRA against online gaming operators. In January, a federal appeals court upheld an Illinois court’s ruling against former players of Amaya Gaming’s PokerStars and Full Tilt online poker sites who’d sued to recover losses incurred prior to the 2011 exit of those brands from the US market.
