A spate of recent court decisions have struck down arguments by plaintiffs in class-action lawsuits that the purchase of virtual chips and the awarding of icons in free-to-play social and mobile games is the same as buying chips at a gaming table, and thus illegal under anti-gambling laws.
App Developer magazine has dissected those court decisions to publish an article titled, “How to Design Mobile Games to Avoid Anti Gambling Statutes.”
The article lists decisions in a list of recent lawsuits seeking to ban not only virtual casino games, but mobile strategy games that award “gold,” “coins” or other icons of value in progressing through the games. Class-action lawsuits have claimed that these awards and virtual chips are simply “markers for value,” the magazine notes. However, the article points out that the courts have repeatedly rejected this notion.
Among the decisions cited are those of Judge James Bredar in rejecting a class-action lawsuit against the mobile Game of War, of Judge Matthew Kennelly in a suit against the game Castle Cash, and of Judge Marsha Pechman in a suit against Big Fish Casino.
In his Game of War decision, Bredar wrote, “There is no real-dollar value attached to ‘gold,’ or chips… None of the prizes have any freestanding value apart from their contribution to game play.” In the Castle Cash decision, Kennelly wrote, “Castle Clash players may be ecstatic when they win rare heroes, honor badges, gems or shards, but these items have no measurable value.” Pechman wrote, “Big Fish Casino is free to play and there is never a possibility of receiving real cash or merchandise, no matter how many chips a user wins.”
App Developer noted two key questions answered by the court decisions:
“a) Can in-game items like gems, coins and gold—even if awarded through a game of chance—constitute items of real world value?
(b) Can unsanctioned secondary markets create real-world value where there would otherwise be none?”
The answers to both questions, the article concluded, is “no.” Taking this into account, the article offered a recipe for defeating any anti-gambling challenge to social games:
“• Do not enable a mechanism by which consumers can ‘cash out’ through the game for anything of real-world value.
“• Prohibit the sale and transfer of accounts in the terms of use and strictly enforce this prohibition.
“• Concomitantly with the first two points, ensure that the terms of use clearly states that users have no property interest in any aspect of the game, but hold, at most, a nontransferable, revocable license to use the game and in-game elements for personal entertainment only. This adds teeth the first two points.”
