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Players' War Against Online Games They Use
The world of free online video games is a big business, including for some law firms. The Edelson firm in Chicago so far this year has sued the makers of the “massively multiplayer” Game of War: Fire Age and Castle Clash as well as the companies that run social casino games Big Fish Casino, Slotomania and Double Down Casino.
The games derive much of their revenue from a tiny sliver of users who pay real-world money for virtual currency to hasten their advancement or refill their pretend coffers. Plaintiffs in the string of suits claim that the games run afoul of various states' laws by running thinly veiled gambling enterprises.
A federal judge in Baltimore recently became the first jurist to weigh in on one of the suits by emphatically rejecting claims against Palo Alto, CA-based Machine Zone Inc., the maker of Game of War , over its operation of a virtual casino within the game. Among other shortcomings, U.S. District Judge James Bredar found that a player's losses in the virtual currency can't support legal claims under California's Unfair Competition Law and other statutes. Mason v. Machine Zone Inc., 15-1107 (D.Md. 2015). “Perceived unfairness in the operation and outcome of a game, where there are no real-world losses, harms, or injuries, does not and cannot give rise to the award of a private monetary remedy by a real-world court,” District Judge Bredar wrote.
But questions related to whether and when virtual world losses can breed real world liabilities are unlikely to disappear. With annual revenues in the casino-style online games alone pegged by analysts to hit $2.4 billion this year, the industry has the attention of plaintiffs' lawyers and regulators.
In all five complaints it's handling, Edelson lawyers cite a study that found more than half of people seeking treatment for gambling disorders say that social casino games were their entry point to the habit. The recently launched state and federal probes into the workings of daily fantasy sports sites DraftKings and Fan-Duel have renewed the discussion over where the line should be drawn between a game of skill and a game of chance.
In the Machine Zone suit, Mia Mason, a Maryland woman who plays Game of War , claimed that she lost more than $100 worth of the virtual currency wagering at an in-game casino where players can place bets on a virtual wheel.
The Edelson lawyers argued that the in-game casino was an unlawful “slot machine or device” under California's gaming statute and that Machine Zone violated California's Unfair Competition Law by owning and operating it.
But Judge Bredar concluded that, although the in-game casino might resemble a classic game of chance aesthetically, Game of War as a whole is predominantly a game of skill. Lawyers at Sheppard Mullin Richter & Hampton, who represent the maker of Castle Clash describe Judge Bredar's decision as persuasive authority for the argument that anti-gaming laws don't apply to “virtual videogames with fictional heroes.”
Ross Todd is a Senior Reporter with The Recorder, the San-Francisco-based ALM sibling of Entertainment Law & Finance.
The world of free online video games is a big business, including for some law firms. The Edelson firm in Chicago so far this year has sued the makers of the “massively multiplayer” Game of War: Fire Age and Castle Clash as well as the companies that run social casino games Big Fish Casino, Slotomania and Double Down Casino.
The games derive much of their revenue from a tiny sliver of users who pay real-world money for virtual currency to hasten their advancement or refill their pretend coffers. Plaintiffs in the string of suits claim that the games run afoul of various states' laws by running thinly veiled gambling enterprises.
A federal judge in Baltimore recently became the first jurist to weigh in on one of the suits by emphatically rejecting claims against Palo Alto, CA-based Machine Zone Inc., the maker of Game of War , over its operation of a virtual casino within the game. Among other shortcomings, U.S. District Judge James Bredar found that a player's losses in the virtual currency can't support legal claims under California's Unfair Competition Law and other statutes. Mason v. Machine Zone Inc., 15-1107 (D.Md. 2015). “Perceived unfairness in the operation and outcome of a game, where there are no real-world losses, harms, or injuries, does not and cannot give rise to the award of a private monetary remedy by a real-world court,” District Judge Bredar wrote.
But questions related to whether and when virtual world losses can breed real world liabilities are unlikely to disappear. With annual revenues in the casino-style online games alone pegged by analysts to hit $2.4 billion this year, the industry has the attention of plaintiffs' lawyers and regulators.
In all five complaints it's handling, Edelson lawyers cite a study that found more than half of people seeking treatment for gambling disorders say that social casino games were their entry point to the habit. The recently launched state and federal probes into the workings of daily fantasy sports sites DraftKings and Fan-Duel have renewed the discussion over where the line should be drawn between a game of skill and a game of chance.
In the Machine Zone suit, Mia Mason, a Maryland woman who plays Game of War , claimed that she lost more than $100 worth of the virtual currency wagering at an in-game casino where players can place bets on a virtual wheel.
The Edelson lawyers argued that the in-game casino was an unlawful “slot machine or device” under California's gaming statute and that Machine Zone violated California's Unfair Competition Law by owning and operating it.
But Judge Bredar concluded that, although the in-game casino might resemble a classic game of chance aesthetically, Game of War as a whole is predominantly a game of skill. Lawyers at
Ross Todd is a Senior Reporter with The Recorder, the San-Francisco-based ALM sibling of Entertainment Law & Finance.
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