Washington Sweepstakes Laws: Where Virtual Coins Are Already Money
Washington sweepstakes laws need no dedicated statute — since Kater, a virtual chip with no redemption path at all has counted as a thing of value.
| Authority | Kater v. Churchill Downs Inc., 886 F.3d 784 (9th Cir. 2018) |
|---|---|
| Holding | Virtual chips that extend play are a “thing of value” under RCW 9.46 |
| Consequence | Big Fish Games settled related claims for $155 million |
| Underlying law | RCW 9.46 — Gambling Act; Recovery of Money Lost at Gambling Act |
| Status | No sweeps-specific ban; civil-litigation exposure is the risk |
The doctrine
The Ninth Circuit held that virtual chips extending the privilege of play are a thing of value under Washington law — even where the chips cannot be cashed out, transferred, or redeemed for anything. The prize element is satisfied by the continued play itself. Big Fish settled for $155 million.
Washington is therefore the strictest jurisdiction in the United States for social gaming, and by a wide margin. Every other state’s analysis turns on redemption. Washington’s turns on sale.
The line, stated precisely
Kater’s trigger is the purchase. The plaintiff bought chips. The court’s reasoning ran from that purchase — consideration — through chance to the extended play it treats as the prize. A platform that never sells anything never enters the analysis, because the consideration element is never satisfied and the Recovery of Money Lost at Gambling Act gives a plaintiff nothing to recover.
This is the hard constraint on every free-to-play design decision, and it is the reason Flickloot has no shop, no coin packs, and no purchase path of any kind. The day anything is sold, the model breaks — in one state, and that is one state too many.
Sources
- Verified Kater v. Churchill Downs Inc., 886 F.3d 784 (9th Cir. 2018).
- Verified Big Fish Games / Churchill Downs settlement, $155 million (2020).
- Verified RCW 9.46 (Washington Gambling Act); RCW 4.24.070 (Recovery of Money Lost at Gambling).