Big Fish Casino is, according to a federal appeals court, an illegal gambling operation under Washington State law. Judge Milan D. Smith of the Ninth Circuit of U.S. Court of Appeals handed down his decision earlier this week as part of a case that started back in 2015 and now has major implications for the social gaming space.
The case started when a woman named Cheryl Kater sued Big Fish Casino after purchasing $1,000 worth of virtual chips on the site. In an epic fit of buyer’s remorse, Kater then sued the site claiming that her virtual chips were actually constituted something of value, which rendered the whole transaction illegal under Washington State law.
Back in 2016 a district court judge said Kater’s case had no merit but the regretful gambler appealed the decision and found a sympathetic ear in Judge Smith’s courtroom. In his ruling, Smith ripped apart the entire social casino business model and its idea that virtual chips aren’t worth anything saying:
Despite collecting millions in revenue, Churchill Downs, like Captain Renault in Casablanca, purports to be shocked — shocked! — to find that Big Fish Casino could constitute illegal gambling. We are not. We therefore reverse the district court and hold that because Big Fish Casino’s virtual chips are a ‘thing of value,’ Big Fish Casino constitutes illegal gambling under Washington law.
The judge’s ruling doesn’t mean that Kater is the winner and can get her $1,000 back. It merely means that the case has enough merits to be heard in a federal court. The owners of Big Fish Casino, Aristocrat Leisure Ltd., can’t be too happy about the ruling. They purchased the site back in November for nearly $1 billion from Churchill Downs and could not possibly be interested in spending that much money for a site that could potentially be ruled illegal in any number of US States.
Industry watchers will be keeping a close eye on this case, which does have significant ramifications for the social casino sector.