Australian slot machine maker Aristocrat Leisure has agreed to pay $31 million in a class action lawsuit brought by US players who lost significant amounts of money to purchase virtual chips on social casino games developed by one of its divisions.
The company was embroiled in two class action lawsuits in the US relating to its Big Fish Games casual gaming division.
Aristocrat purchased Big Fish two years ago in a $1.3 billion deal. The latter company develops digital social casino games such as blackjack, poker, and slots. Big Fish’s games are free to download but players need to buy virtual chips to continue playing.
Shortly after Aristocrat purchased the social casino games developer from US casino and racetrack operator Churchill Downs Incorporated, the US Court of Appeals for the Ninth Circuit ruled that the games produced by Big Fish constituted illegal online gambling in Washington state.
Two class action suits were filed in the wake of that ruling. The lead plaintiff in the first of the two cases, Manasa Thimmegowda, told court that she started playing Big Fish Casino on her smartphone in 2017. Within a month, she lost more than $3,000 buying virtual chips to keep playing.
The court ruled that Big Fish has violated Washington law and has “illegally profited” from tens of thousands of players of its Big Fish Casino and other similar casino games, which all constituted illegal online gambling.
The Settlement
Cheryl Kater, a lead plaintiff in the other lawsuit, told court that she lost more than $1,000 in virtual chips on Big Fish’s games.
The class action suits brought against the games creator sought to reclaim the money lost by users on Big Fish Casino, Jackpot Magic Slots, and Epic Diamond Slots, all developed by Big Fish. In addition, the plaintiffs asked the defendant to cover lawyers’ fees and punitive damages as part of a nationwide settlement class action.
In a statement from earlier today, Aristocrat said that the settlement was reached after mediation between the Australian company, Big Fish, Churchill Downs, and the plaintiffs. The recently reached in-principle agreement will see the gambling companies settle the two class action cases for a combined of $155 million.
Aristocrat has agreed to pay $31 million of the total, while Big Fish’s previous owner will pay the remaining $124 million.
The settlement is subject to approval by the US Federal District Court for the Western District of Washington.
The previous US Court of Appeals ruling brought up for discussion whether virtual chips in social casino games had any value and whether such games should be deemed illegal online gambling in the US.
Virtual chips cannot be exchanged for real money, but the court noted in its ruling that players need to buy more of them in order to be able to continue to play social casino games. According to the US Court of Appeals, this constituted illegal online gambling and virtual chips were a “thing of value.”
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