Washington’s gaming industry has unveiled a new lobbying organization, Game On WA, whose goal is to persuade lawmakers to exempt smartphone games from local gambling laws.
A federal court decision that created confusion about the legal status of smartphone apps purchased in the state sparked the creation of Game On WA. The organization seeks legislation that would make clear that the state’s anti-gambling laws shouldn’t include “social games.”
Companies behind the effort include Microsoft, Valve and Big Fish Games. They note that until last year, “social games” didn’t draw the attention of the Washington State Gambling Commission. But then a judge from the Ninth Circuit Court of Appeals ruled a Big Fish Casino game violated the state’s gambling laws.
The games that are part of Big Fish offer traditional casino games such as slots and blackjack and use virtual chips, which are not backed by actual cash. No cash changes hands. Players play until they lose all their chips—at which point they must wait for more free chips or buy more chips.
This decision led to other lawsuits challenging the legality of the virtual chip games to be filed.
Real money is involved. In one such lawsuit, JP Morgan is quoted as saying that such virtual games generated more than $3.8 billion worldwide in 2016.
WA co-chair Kristina Hudson is concerned that the state could be isolated from such game manufacturers eager to avoid lawsuits.
She told Geekwire.com, “With the legal status of online games in limbo the companies are likely going to protect themselves by geofencing Washington state, so our players will no longer have access to the games that they have been playing.”
Hudson is executive director of OneRedmond, which serves the function of a Chamber of Commerce for the city of Redmond, Washington, where Microsoft is based.
The other co-chairmen of Game on WA are former Washington Governor Gary Locke and Michael Schutzer, chief executive officer of the Washington Technology Association.
However, Washington lawmakers are preoccupied with crafting a sports wagering bill for the next session.
Last year Big Fish asked the Washington State Gambling Commission to issue a ruling that social games are not defined as gambling under state law.
According to commission spokeswoman Heather Songer, “Our commissioners heard arguments from both sides at a public meeting. They decided not to enter an order. The main reason for their decision was not wanting to interfere with ongoing civil litigation.”
Hudson says that unless such a ruling is forthcoming many social games companies, which employ about 20,000 people total, will leave the state.
She told Geekwire, “This has caused uncertainty in the industry. Not only does this uncertainty make it difficult to retain and grow our local companies, but it also makes it difficult to recruit new companies to the region.”
