Washington’s social gamers unite to fight state gambling law

TAGs: game on washington, Playtika, social gaming, washington

game-on-washington-social-gaming-gambling-lawSocial gaming advocates have formed a new group to lobby Washington State lawmakers while social casino giant Playtika’s Chinese owners are finding it hard to refinance their debt.

This week saw the birth of Game On WA, a self-described group of “civic leaders, industry experts and tech executives united in support of the social games industry.” The coalition’s co-chairs include former state governor Gary Locke and Kristina Hudson, head of a group that represents the city of Redmond’s chamber of commerce.

Game On wants to convince state pols to consider approving legislation that would ensure social gaming and other free-to-play operators have a legal right to operate in Washington. Game On says the current legal climate threatens thousands of local jobs in the video and social games sector.

In March 2018, a federal court ruled that Washington state law prohibited gaming sites from selling virtual chips for use in Big Fish Games social casino titles. The suit was brought by a disgruntled Big Fish customer who claimed that gambling with these chips represented “the staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person’s control or influence,” aka gambling.

A flood of copycat lawsuits targeting other social gaming operators swiftly followed that ruling, looking to piggyback on Washington’s loosely defined ‘something of value’ statute. The Washington State Gambling Commission (WSGC), which hasn’t shown love to the video game industry, saw no need to intervene, leaving any further clarification up to state legislators.

Game On’s Hudson told GeekWire that the “uncertainty” caused by the 2018 ruling had not only made it “difficult to retain and grow our local companies, but it also makes it difficult to recruit new companies to the region.” Local gamers are also facing the likelihood of all online game companies geofencing the state.

WSGC spokesperson Heather Songer said gamers shouldn’t get their hopes up, as the focus of the upcoming abbreviated legislative session will be on authorizing legal sports betting at tribal casinos, leaving the social casino question for another day.

Meanwhile, social casino giant Playtika is reportedly finding it tough to raise some badly needed cash. Reuters reported Wednesday that Playtika’s Chinese owners, who include billionaire Jack Ma, have been trying since November to raise $2.5b to refinance an existing bridge loan. Finding few takers, Playtika was forced to hike the proposed loan’s interest rate from 400 basis points above Libor to 600bp.

Investors are reportedly concerned by Playtika’s exposure to the Chinese market, which is undergoing a contraction thanks to the US-China trade war (and neither side is showing signs of budging on their respective positions). Also, much larger console game makers are turning their attention to the mobile gaming sector, which could threaten Playtika’s dominant position.


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