Zynga Poker Reaches Lawsuit Settlement

Zynga Inc, the company behind Zynga Poker and a variety of the other most popular social casino games on the web, has reached a $12 million settlement agreement with the plaintiffs in a lawsuit over purported claims that their online casino games are in fact illegal gambling. 

Virtual chips redefined as objects of value

From April to October of 2015, a series of litigations were filed against Zynga Inc, alleging that their online casino games actually constitute illegal gambling under Washington State law. The company has reached a new settlement with the plaintiffs in one of these lawsuits, marking the fifth similar piece of litigation the company has settled. This settlement will award the plaintiffs an amount of $12 million, adding more to the $233 million total that the company has agreed to pay as part of the four previous settlement arrangements.

A ruling by Washington’s Ninth Circuit court is at the heart of the litigation. Some of Zynga’s game offerings provide players with the ability to play a certain amount for free, then allowing players to purchase virtual chips for real money if they wish to continue playing. Since the virtual chips themselves have no intrinsic or redemption value this does not constitute gambling in the eyes of most legislators, however, in Washington State the court took a different stance. The appellate court ruled that the virtual chips themselves hold value, therefore subjecting Zynga to the same rules and regulations as any casino or other gaming operator in the state.

Seven years in the making

This settlement marks the fifth and final lawsuit in a series of litigations dating back to April of 2015. After more than seven years of legal battling the issue has finally been resolved, with the plaintiffs having achieved their goal of recouping their “losses” at a game that never offered players the ability to win anything beyond extended play time to begin with. The $12 million settlement represents approximately 25% of the damages reported, checking in towards the low end of the 20-60% range allowed under Washington State law in cases such as these.

The extensive litigation has come to an end, and with a result that representatives for the plaintiffs say “will be life-changing for many Class Members”. Law firms Edelson PC and Tousley Brain Stephens PLLC took the lead on the litigation, and will benefit greatly themselves from this large settlement. A statement from the winning side expressed enthusiasm over the settlement, praising the “excellent results delivered here that equal those of the settlements reached in aggressively litigated cases”.

Are Washington residents really safer?

The settlement seemingly answers the question of whether or not playing an online social casino game for worthless virtual chips counts as illegal gambling. At least in Washington it does, putting play-money games firmly under the same regulations as the multitude of retail gaming establishments located throughout the state. Washington has notoriously taken a hard line against all types of gaming, from their initial stance during the rise of the online poker gray market in the early 2000s to their current stance prohibiting daily fantasy sports games that are perfectly legal in nearly every other state in the country.

Attitudes about online gambling are shifting more positively in the country as a whole, as most states have either legalized sports betting or are moving in that direction and a variety of other online gambling games grow in both legality and popularity. Washington is headed in the other direction, restricting the ability of its residents to make their own choices in terms of spending their hard-earned cash on the forms of entertainment they prefer.

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