Roblox asks judge to dismiss illegal gambling suit

April 3, 2024
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The company argued that the plaintiffs’ claims were barred by Section 230 of the Communications Decency Act, which prevents any “interactive computer service” — in this case, Roblox — from being held liable for third-party content published on its platform. The court, however, held that Section 230 doesn’t apply here because Roblox isn’t being held liable for content published on its platform. It’s being accused of “facilitating transactions between minors and online casinos that enable illegal gambling, and for allegedly failing to take sufficient steps to warn minors and their parents about those casinos.”

In their complaint, Rachelle Colvin and Danielle Sass accused Roblox of facilitating access to and profiting off of “virtual casinos that exist outside the Roblox ecosystem.” To access these casinos, Roblox users — the vast majority of whom, the complaint notes, are children — buy a digital currency called “Robux” through the Roblox website, which they can then use on gambling websites Satozuki, Studs, and RBLXWild. “Throughout this process, Roblox keeps track of all these electronic transfers and has knowledge of each transfer that occurs in its ecosystem,” the complaint says. 

Roblox filed a motion to dismiss, effectively arguing that the children didn’t actually lose any money when they bought Robux and used them to gamble. The company compared Robux purchases to “purchasing cinema or amusement park tickets” since the users were paying “for the pleasure of entertainment per se, not for the prospect of economic gain.” This argument didn’t persuade the judge, who noted that movie or amusement park tickets don’t lose their value once they’re purchased.

“Those tickets do have economic value, even if they cannot be exchanged for cash,” the March 26th order, filed in the US District Court for California’s Northern District, reads. “Similarly, when someone purchases Robux on the Roblox platform, they do so because they can exchange Robux for in-game experiences that are of value to them. There is no reason to distinguish the movie or the roller coaster ride in the real world from an in-game experience in the virtual world.”

There’s also the issue of what these in-game experiences entail. Roblox countered by saying the kids got what they bargained for when they used their Robux in online casinos. “But these are children we’re talking about,” the judge wrote. Turning Roblox’s amusement park analogy on its head, the judge wrote that this situation was more akin to “a casino setting up shop outside an amusement park and luring a child away to wager and lose the tickets to an illegal gambling operation—tickets that the casino can then exchange for cash.”

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