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Washington state bill would protect social casinos from loss recovery


Lawmakers in the state of Washington have introduced a bill that would exempt social games, video game loot boxes and skin gambling from gambing loss recovery laws.

The bill – House Bill 2720 – is sponsored by Zack Hudgins, Brandon Vick, Bill Jenkin and Brian Blake and has been referred to the Civil Rights & Judiciary Committee.

Under Washington’s Recovery of Money Lost at Gambling Act, a person who loses money or anything of value in an illegal gambling game has a cause of action to recover the money or value of the items lost from the operator or winner of the game.

Whether this law applied to games played for virtual tokens that could not be exchanged for money – such as in social games or video game loot boxes – became a source of debate after a 2015 class action suit against Seattle-based and Aristocrat Leisure-owned Big Fish Gaming to recover losses.

Initially, the class action suit was struck down, but the US Court of Appeals for the Ninth Circuit overruled the original judgement on the grounds that the virtual tokens could be purchased for money and were therefore a thing of value.

As this ruling considered these social games to be online gambling, it also effectively made them illegal in the state. The bill specifies that games for virtual tokens would not be considered gabling, “for the purposes of recovering losses” rather than in all contexts.

In addition, in an April 2019 lawsuit, tribal casino operator the Quinault Indian Nation accused Valve Corporation of facilitating illegal gambling on its online video games distribution platform Steam through its use of skin gambling – gambling using in-game items. Valve had previously faced a similar class action suit in 2016, which was struck down.

The bill would come into effect 90 days after the legislative session in which it is passed is adjourned. If the bill is passed in the 2020 session, which is scheduled to end on 12 March, the bill would come into effect on 10 June.