Rice v. Aristocrat Leisure Ltd et al

On August 11, 2023, plaintiff Lisa Rice filed a class action lawsuit in the U.S. District Court for the Western District of Washington against Aristocrat Leisure Ltd, its subsidiaries Aristocrat Technologies, Inc., Big Fish Games, Inc., and Product Madness, Inc. The suit alleges that social casino games like “Cashman Casino” and “Heart of Vegas” operate as illegal gambling under Washington law because players purchase virtual chips with real money and can lose them, but cannot cash out winnings. Rice claims this practice violates the Washington Consumer Protection Act and the state’s Recovery of Money Lost at Gambling Act, seeking to recover all money lost by Washington consumers. The complaint argues that despite being marketed as free-to-play and social, the games’ mechanics mirror slot machines, and the defendants profit by encouraging continuous purchases.

The case is ongoing. The defendants have filed a motion to dismiss, arguing that the virtual chips do not satisfy the legal definition of gambling because they cannot be exchanged for cash, and class certification remains pending. No final judgment has been entered.

Whether social casino apps that sell virtual chips for real money constitute illegal gambling under Washington state law, given that players cannot redeem chips for cash but the chips hold subjective monetary value and can be depleted; and whether such practices violate consumer protection statutes.

The lawsuit is closely watched as it could set a precedent for the social casino industry, potentially forcing game operators to stop selling virtual currency or fundamentally alter their business models. It may also embolden similar class actions in other states, increasing legal pressure on developers of free-to-play gambling-themed games.