Double Down Casino and Big Fish Casino -- both free-money slot apps -- are accused of causing addicted gamblers to lose big money with no possible upside
This is a bizarre and somewhat sad story.
Double Down Casino and Big Fish Casino, which are run by two separate companies, both look like real-money online casino apps. But they're not. The coins you win on these casino apps have no value, and cannot be exchanged for real money.
However, the companies are accused of using "predatory methods to target compulsive gamblers", encouraging players to buy more chips after their initial free allotment runs out.
Amazingly, despite there being zero upside to winning on these "casino" apps, some people have spent as much as $400,000 buying play-money chips to keep playing, and they describe their need to do so in the same way compulsive gamblers behave.
In March, a $155 million settlement was reached with Big Fish in a class action lawsuit.
Presently, there are also lawsuits against Double Down, including one which attempts to use an old Washington law which allows all money won through illegal gambling to be refunded.
There's also a woman who recently did an interview with NBC News, Kathleen Wilkinson. She's a grandmother from Montana, and claims she lost her "life savings" of $50,000 playing on the Double Down Casino. She's presently suing Double Down, as well.
The legal question here is interesting.
The attorneys suing these companies claim that these apps constitute "illegal gambling", and they claim that the chips which people purchase are considered "something of value". In the Big Fish case, this was upheld to be true. In all other cases prior to this, these arguments failed.
The "something of value" test has to do with the three elements which define gambling:
- Chance
- Consideration
- Prize
"Chance" means that there's a random element to winning or losing, and that's not all skill-related. "Consideration" means that the player is putting up something of value to possibly lose. "Prize" means that the player receives something of value if they win.
There's definitely "chance" and "consideration" here, as these slot machines run on a random number generator, and there's real money being spent on the chips. However, attorneys for the apps have argued that the "prize" element isn't there -- that the players only win worthless chips. However, the plaintiffs' attorneys argue that these chips DO have value, as winning on these apps gives you more of the chips which you otherwise spend money on, thus giving people a feeling that they're actually "winning" something.
How do I feel about this? I don't agree that these apps are illegal gambling, but I do believe there needs to be massive reform involving in-app purchases, as it's a super-immature area of law, and there's tons of shady stuff going on. A good example of this was the 21 Blitz situation, which DOES more resemble a gambling game, and indeed their ads are highly misleading.
