Print PDF
$155 Million Offered to Settle Two Big Fish Games Class Action Lawsuits
,

In order to settle two class action lawsuits -- Thimmegowda v. Big Fish Games and Kater v. Churchill Downs -- regarding games offered by Big Fish Games, Churchill Downs Incorporated has agreed to pay $124 million and Aristocrat Leisure Limited has agreed to pay the remaining $31 million for a total settlement amount of $155 million – subject to approval by the U.S. District Court. The plaintiffs, Cheryl Kater, Suzie Kelly and Manasa Thimmegowda, alleged the social casino platforms, “Big Fish Casino,” “Jackpot Magic Slots” and “Epic Diamond Slots,” offered gambling games prohibited under Washington state law.

Big Fish Casino is a social gaming application that provides “freemium” online casino games. Similar to many other providers, users are awarded free chips when they create their account and may obtain additional chips by winning games, via free chip replenishment, or by purchasing additional chips. Big Fish Games was owned by Churchill Downs Incorporated and subsequently sold to Aristocrat Leisure Limited earlier this year.

In 2015, Cheryl Kater brought a purported class action alleging that she (and others similarly situated) should recover monies they spent on Big Fish Casino under Washington’s “Recovery of Money Lost at Gambling Act” (“RMLGA”) and Consumer Protection Act, as well as under a theory of unjust enrichment. The crux of the argument was that Big Fish conducted illegal gambling under Washington state law—and therefore, Ms. Kater should recover any monies she spent with Big Fish.

The Honorable Marsha J. Pechman, who was serving as the Chief Judge of the United States District Court for the Western District of Washington at the time, dismissed Ms. Kater’s complaint in November 2015. Ms. Kater filed an appeal, and on March 28, 2018, the Ninth Circuit overturned Judge Pechman’s decision. In sum, the Ninth Circuit Court held that the virtual chips constituted a “thing of value,” and therefore, Big Fish had conducted illegal gambling under Washington law. The decision was based on Washington’s statutory definition of “thing of value,” which reads:

[A]ny 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.

Wash. Rev. Code § 9.46.0285 [emphasis added].

Following mediation between the Aristocrat group, the Big Fish brand, Churchill Downs and plaintiffs, the companies agreed to offer the $155 million settlement which remains subject to approval by the U.S. District Court for the Western District of Washington.

If you have any questions regarding this blog or the freemium model, please contact authors Karl Rutledge at krutledge@lewisroca.com, Glenn Light at glight@lewisroca.com, or Mary Tran at mtran@lewisroca.com.

Tags: Regulated Commercial Gaming
  • Karl F. Rutledge
    Partner

    Karl is known for his dedication and unmatched industry knowledge. His experience helps clients take full advantage of the opportunities in an evolving market.

    Karl Rutledge is chair of the Commercial Gaming Group and a partner in the in the firm’s Las Vegas office. He focuses on land-based ...

  • Glenn J. Light
    Partner

    Glenn provides practical solutions to his clients’ problems, and understands the importance of hard work and diligence to meet their business goals.

    Glenn Light is a member of the firm's Gaming Industry Group, assisting clients with a variety of gaming and transaction matters relating to ...

About This Blog

Lewis Roca is immersed in your industry and invested in your success. We share insights and trends that can affect your business.

Search

Topics

Archives

Authors

Recent Posts

Jump to Page

How Can We
Help You?

By using this site, you agree to our updated Privacy Policy and our Terms of Use.