Fife v. Scientific Games Corp, No. 2:2018cv00565 - Document 38 (W.D. Wash. 2018)
Court Description: ORDER GRANTING in part 28 Defendant's Request for Judicial Notice and DENYING in part 28 Defendant's Motion to Dismiss for Failure to State; signed by Judge Ronald B. Leighton.(DN)
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supports this conclusion. 127 Wash.App. 231 (2005). In Bullseye, 23 players could obtain a sports card from an electronic slot machine either by inserting money into 24 DKT. #28 - 8 Case 2:18-cv-00565-RBL Document 38 Filed 12/18/18 Page 9 of 12 1 the machine, using credits earned from prior play sessions, or presenting a promotional voucher. 2 Id. at 235. Despite the fact that players could obtain a new voucher each day through a number of 3 means, the court still held that the credits earned from play sessions were a “thing of value” that 4 extended the ability to play. Id. at 235, 242. Thus, just as the players in Bullseye could wait a day 5 to regain their play privileges through a new voucher, Scientific’s players could wait an hour or 6 so for another free spin. Nonetheless, in both cases, the credits and coins are a “thing of value” 7 because they extend the privilege of playing a game that would otherwise cost money. Finally, the various Gambling Commission materials submitted by Scientific are 8 9 unpersuasive. While the pamphlet offered by Scientific does state that social gaming is not 10 gambling if there is no prize, it also purports to provide only “general guidance” to consumers. 11 Dkt. #43-1. The Ninth Circuit already declined to defer to this pamphlet, the slideshow, and the 12 meeting minutes. See Kater, 886 F.3d at 788; Dkt. #31, Exs. E-G. Likewise, the Commission’s 13 press releases regarding the Ninth Circuit’s Kater ruling merely assert that the Commission did 14 not participate in the case and that it may continue for several more years. They do not express 15 any specific position with respect to the underlying issues. Dkt. #31, Exs. H, I. 16 c. 17 Whether Scientific’s In-App Purchases are “Bona Fide Business Transactions” Scientific also argues that its app is exempt from the statutory prohibition on gambling 18 because it falls within the “bona fide business transaction” exception. This exception reads as 19 follows: 20 21 22 23 24 DKT. #28 - 9 Case 2:18-cv-00565-RBL Document 38 Filed 12/18/18 Page 10 of 12 1 RCW 9.46.0237. According to Scientific, its app involves “bona fide business transactions” 2 because players merely pay for the privilege of entertainment. The fact that players do not know 3 how much entertainment they will receive does not make these games any different from buying 4 tickets to a boxing match, which could last only a few rounds or many. 5 Fife responds that § 9.46.0237 contains a non-exhaustive list after “bona fide business 6 transactions valid under the law of contracts” that identifies the purchase of securities and 7 insurance as two examples. Fife contends that, applying Washington principles of statutory 8 interpretation, the exception should be limited to transactions similar to insurance and securities. 9 When construing a state statute, a federal court must apply that state’s principles of 10 statutory interpretation. Planned Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908, 925 (9th 11 Cir. 2004). Washington courts view statutes using the “including but not limited to” language as 12 unambiguously creating “an illustrative, not exhaustive, list.” State v. Joseph, 416 P.3d 738, 741 13 (Wash. Ct. App. 2018). This list of specific items modifies the general term, such that the latter 14 “will be deemed to ‘incorporate those things similar in nature or comparable to the specific 15 terms.’” Id. (quoting State v. Larson, 184 Wash. 2d 843, 849, 365 P.3d 740, 743 (2015)). To 16 determine what constitutes a “similar” item, courts look to the “clearly stated legislative intent” 17 behind the statute. Id. at 741-42. 18 Here, the list clearly contemplates excluding purchases of securities or other investments 19 and insurance. Buying virtual coins is not “similar in nature” to either of these transactions 20 because the buyer is not protecting themselves against a fortuitous risk or obtaining a stake in a 21 company. Scientific argues that it is similar to buying a ticket to a sports event, which is 22 obviously legal, but that does not mean that transactions of this nature are the object of this 23 particular exception. 24 DKT. #28 - 10 Case 2:18-cv-00565-RBL Document 38 Filed 12/18/18 Page 11 of 12 1 Scientific argues that “bona fide business transactions valid under the law of contracts” is 2 a broad category that unambiguously includes the sale of credits used for amusement games. In 3 support of this, Scientific points to RCW 9.46.010, which states that the Washington Gambling 4 Act seeks to “avoid restricting participation by individuals in activities and social pastimes.” 5 However, the rest of this sentence limits the types of social pastimes to those that are “more for 6 amusement rather than for profit, do not maliciously affect the public, and do not breach the 7 peace.” RCW 9.46.010. While the wording is ambiguous regarding whose profit is at issue, 8 Scientific certainly profits from its games and Fife would argue that they have a malicious effect 9 on a portion of the public. In any case, social pastimes geared toward amusement contrast 10 sharply with insurance and securities transactions, which are clearly for profit and have nothing 11 to do with amusement. The legislative intent therefore does not support Scientific’s 12 interpretation. 13 In any case, Scientific misconstrues the nature of the “transaction” at issue in this case. 14 Whereas traditional gambling consists of a single transaction (money for a chance to win), 15 Scientific’s app divvies up this process between two connected transactions. Although the first 16 transaction allows a user to obtain the virtual coins, the second transaction of spending them in 17 Scientific’s games is what fits the statutory definition of gambling. See RCW 9.46.0237 18 (defining gambling as “staking or risking something of value upon the outcome of a contest of 19 chance or a future contingent event not under the person’s control or influence”). Consequently, 20 regardless of whether purchasing coins from Scientific is similar to buying securities or tickets to 21 a baseball game, buying coins and then using them to play Scientific’s games is not a “bona fide 22 business transaction.” Id. 23 24 DKT. #28 - 11 Case 2:18-cv-00565-RBL Document 38 Filed 12/18/18 Page 12 of 12 1 CONCLUSION 2 For the foregoing reasons, Defendant Scientific’s Motion to Dismiss (Dkt. #28) is 3 4 DENIED. IT IS SO ORDERED. 5 6 Dated this 18th day of December, 2018. 7 8 A 9 Ronald B. Leighton United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 DKT. #28 - 12
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