Washington court: Social casino games do not constitute gambling

In the absence of a stake and the chance of a monetary return, In the absence of a stake and the chance of a monetary return, online social games using purchasable virtual chips or coins is not gambling, ruled 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 does give any prizes aside from the amusement that the games are providing the players.

The court added that even though the virtual chips can be sold to secondary market, 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 the Washington State Gaming Commission (WGC) ruling, which stated that social games are not gambling because players cannot win money or tangible reward. WGC explained on its website that if 1 out of 3 elements of gambling—prize, consideration (something of value, wager, fee to play), and chance— is removed, the game is not gambling. To keep the online social game legal, there should be a way to play it for free and if “real” money can be used to enhance or extend the play, there must be no prize, WGC added.