Kater v. Churchill Downs Inc., No. 16-35010 (9th Cir. 2018)
Annotate this CaseThe Ninth Circuit reversed the dismissal of a purported class action against Churchill Downs alleging violations of Washington's Recovery of Money Lost (RMLGA) at Gambling Act and Consumer Protection Act, and unjust enrichment. The panel held that Big Fish Casino constituted illegal gambling under Washington law because its virtual chips were a "thing of value." The panel also held that plaintiff could recover the value of the virtual chips lost under the RMLGA. In this case, plaintiff alleged that she lost over $1,000 worth of virtual chips while playing Big Fish Casino, and she can recover the value of these lost chips from Churchill Downs, as proprietor of Big Fish Casino. Therefore, the panel remanded for further proceedings.
Court Description: Washington Gambling Law The panel reversed the district court’s dismissal of a purported class action against Churchill Downs alleging violations of Washington’s Recovery of Money Lost at Gambling Act and Consumer Protection Act, and unjust enrichment; and held that Churchill Downs’ virtual game platform “Big Fish Casino” constituted illegal gambling under Washington law. All online or virtual gambling is illegal in Washington. Big Fish Casino’s virtual chips have no monetary value and could not be exchanged for cash, but Big Fish Casino did contain a mechanism for transferring chips between users, which could be used to “cash out” winnings. The panel held that the virtual chips extended the privilege of playing Big Fish Casino, and fell within Wash. Rev. Code § 9.46.0285’s definition of a “thing of value.” The panel concluded that Big Fish Casino fell within Washington’s definition of an illegal gambling game. See Wash. Rev. Code § 9.46.0237. The panel held that plaintiff Cheryl Kater stated a cause of action under Recovery of Money Lost at Gambling Act where she alleged that she lost over $1,000 worth of virtual chips while playing Big Fish Casino, and she could recover the value of those lost chips from Churchill Downs, as
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