Lawsuit Claims Online Gaming Platform Roblox Facilitates Illegal Gambling

Roblox could potentially land in some hot water after being hit with a lawsuit over alleged illegal underage gambling practices. The issue concerns microtransactions and the use of its in-game currency, Robux, on third-party gambling websites.

The lawsuit was filed in the Northern District of California in August by two mothers, Rachel Colvin and Danielle Sass. They claim their children have gambled on third-party sites using Robux. Some of these sites operate as virtual casinos, enticing players to wager Robux on blackjack, slots, roulette and other games.

Their children, minor plaintiffs in the suit, have allegedly lost thousands of Robux on these sites. Roblox sells Robux on its website. Prices start at 800 Robux for $9.99. Of course, gambling is illegal for minors to participate in. States where gambling is allowed have minimum ages requirements, ranging from 18 to 21, depending on the game or venue.

The lawsuit claims children are able to purchase Robux then use the virtual dollars on gambling sites.

What is Roblox and how do these gambling sites tie in?

While most forms of California online gambling are prohibited, state law does allow sweepstakes casinos. These online casinos offer prizes which can then be redeemed for cash. What makes them legal in California and in most US states is the fact that they are free to play and players don’t gamble with real money.

Roblox is an online gaming platform, released in 2006, where users can go and program games or play games created by other users. The game is free to play, while providing the option to purchase Robux to make in-game purchases. Users can create games and sell game passes, where other users can then make a one-time purchase to play the game through spending Robux.

Three third-party websites have also been named as defendants in the lawsuit.

  • RBXFlip
  • Bloxflip
  • RBLXWild

RBXFlip has been linked to the Roblox community since at least 2019. It continues to invite players to wager Robux to this day.

Lawsuit claims Roblox is aware of other sites using Robux as currency to play games

The lawsuit alleges Roblox is fully aware of these third-party gambling websites and financially benefits from them due to the use of Robux on these sites. The suit claims these sites push children to purchase more and more Robux. The Robux is then used to wager on games on these sites despite Roblox prohibiting in-game gambling on its platform.

Roblox claims it has teams dedicated to investigating these kinds of websites that take advantage of the platform’s currency. Roblox says it then looks for ways to remove them because they violate Roblox’s terms of service. The lawsuit claims the company misleadingly says its platform and in-game currency is safe.

However, Roblox does participate in the controversial microtransactional practice of offering loot boxes. Loot boxes are filled with random, virtual goods that players can purchase using real money to get in-game currency. Loot boxes have been banned in some countries, including Belgium, the Netherlands and Slovakia, but games using them are widely available in the US.

Is there precedent for this kind of lawsuit?

Roblox isn’t the first gaming entity to face a lawsuit related to microtransactions on its platform. Several platforms and game developers have been sued for using loot boxes.

A class-action lawsuit was filed in Canada against Entertainment Arts in 2020. The suit claimed unlawful gambling practices due to the loot boxes EA offers in its FIFA and Madden NFL games. The lawsuit, however, was dismissed in March. The judge did point out that the games do not have an apparent way for users to “cash out” the money they’d put into the game.

In May, Nintendo had a class-action lawsuit brought against it in California by a minor and their guardian over “deceptive and illegal practices” regarding the loot boxes in its Mario Kart Tour game. The free-to-play game offers users a chance at in-game prizes that could potentially give them a competitive advantage if won through the loot box.

Apple, Google Take-Two Interactive and Valve Corporation have all faced similar suits over their microtransactional practices. Like EA, they have all won their cases. However, a significant victory against gaming microtransactions came when Epic Games, the maker of Fortnite, was forced to pay out $245 million due to its practices of leading young gamers to purchase in-game products.

Roblox itself settled a different class-action lawsuit for $10 million over removing items from its game that were won through purchased loot boxes.

Roblox will probably win current lawsuit against it

When it comes to the case against Roblox and the third-party websites, there’s a really good chance it gets dismissed like many similar lawsuits before it. The tech companies have adapted their platforms enough to continue their microtransactional practices within the rules of law. They are likely to continue these practices. In-game transactions generate billions of dollars for the industry every year.

Roblox says in-game gambling is against its policies. It may be hard to prove the company benefits from what goes on off its platform. Based on the EA ruling, this judge may come to a similar conclusion.

As for the third-party online sites, it may be much harder for the suit against them to be dropped. The sites allow for online gambling with a form of in-game currency that is purchased using real money. Adding to that, the currency is from a game target toward children and teens, enticing the demographic to wager their in-game currency on their sites via several classic gambling games.

It’s very possible these sites are forced to settle with the plaintiffs and cease operation.

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