Australian slot machine maker Aristocrat Leisure will finally be able to close the book on two class action lawsuits against its social gaming arm Big Fish Games after a US district court has given a final approval to a $155 million settlement announced last year.
The cases were brought in Washington by players who argued that Big Fish “illegally profited” from tens of thousands of people who played on its Big Fish Casino, Jackpot Magic Slots, and Epic Diamond Slots social casino platforms.
Big Fish develops various social casino games such as slots, blackjack, and poker. All these are free to download. Players are initially awarded a certain amount of virtual chips but when they exhaust these, they need to purchase more to keep playing.
In March 2018, Judge Milan D. Smith of the US Court of Appeals for the Ninth Circuit ruled that the virtual chips were a “thing of value” and that their purchase constituted illegal online gambling under Washington state law. According to its provisions, a thing of value means:
… any money or property, any token, object or article exchangeable for money or property, or any form of credit or promise, directly or indirectly, contemplating transfer of money or property or of any interest therein, or involving extension of a service, entertainment or a privilege of playing at a game or scheme without charge.
The ruling was issued in response to a lawsuit filed in 2015 by a regular Big Fish Casino player who argued that she had spent more than $1,000 on virtual chips in a very short period of time in order to be able to continue playing. The second class action suit was brought to court in the wake of Judge Smith’s judgment.
Aristocrat to Pay $31 Million as Part of Settlement
Aristocrat purchased Big Fish in 2018 from Kentucky-based casino and racetrack operator Churchill Downs in a $1.3 billion deal. The Australian company will pay $31 million as part of the settlement, which is only a fraction of what needs to be paid for the two class action suits to be finally settled.
The bulk of what’s due, approximately $124 million, will be paid by the social game developer’s former owner. Aristocrat and Churchill Downs announced the settlement last year, but it needed approval from the US Federal District Court for the Western District of Washington.
That final approval was issued last month, according to a Tuesday ASX filing by Aristocrat.
As part of the settlement, Big Fish agreed to change its casino games’ mechanics so that players don’t need to purchase virtual chips to continue playing. The studio also agreed to establish a voluntary self-exclusion policy.
News about the closure of the Big Fish cases came days after it emerged that rival social game developer Zynga is facing a similar class action suit in California over its social slots products.
Source: “Aristocrat Leisure (ASX:ALL) settle two lawsuits”, The Finance News Network, March 2, 2021