## Facts

- Scientific Games Corp. operated “social casino” apps that simulate casino-style games of chance (including slot-style games) on mobile platforms and social media.
- New users received free virtual coins/chips; continued play required coins, and play stopped once coins were depleted unless the user obtained more.
- Users could obtain more coins through periodic free bonuses or by purchasing coins with real money through in-app purchases.
- Purchased coins and coins won during play were functionally identical and could be wagered to win additional coins, which in turn enabled further play.
- Sheryl Fife played one of the apps, bought virtual coins, and lost them during gameplay.
- Fife sued on behalf of a putative class under Washington gambling statutes, seeking to recover alleged gambling losses and to obtain injunctive relief.
- Scientific Games moved to dismiss under Rule 12(b)(6) and asked the court to take judicial notice of various public materials, including items from the Washington State Gambling Commission.

## Issues

1. Whether virtual coins/chips used in the apps qualify as a statutory “thing of value,” making gameplay “gambling” under Washington law.
2. Whether the in-app purchases were excluded from “gambling” as a statutory “bona fide business transaction,” warranting dismissal at the pleading stage.
3. Whether, and to what extent, the court should consider external materials through judicial notice or incorporation by reference on a Rule 12(b)(6) motion.

## Decision

- The court denied the motion to dismiss as to the core Washington gambling claims, holding the complaint plausibly alleged illegal gambling.
- The court held the virtual coins/chips plausibly constituted a “thing of value” because they extended the privilege of playing games that otherwise required payment.
- The court declined to dismiss based on the “bona fide business transaction” exception at the pleading stage.
- The court granted in part the request for judicial notice for limited purposes but refused to treat noticed materials as controlling legal authority or as establishing disputed facts.

## Legal Principles

- Under Washington’s gambling statute, “gambling” includes risking a “thing of value” on a contest of chance based on an understanding of receiving “something of value” upon a certain outcome.
- A “thing of value” includes items conferring a “privilege of playing at a game or scheme without charge”; virtual game currency can satisfy this definition when it enables continued play that would otherwise require purchase.
- The availability of free methods to obtain credits (e.g., periodic bonuses) does not, by itself, prevent credits from being a “thing of value” when they materially extend play privileges.
- At the Rule 12(b)(6) stage, courts generally do not resolve fact-dependent statutory exceptions (such as “bona fide business transaction”) where application is not clear as a matter of law.
- Judicial notice and incorporation by reference permit limited consideration of certain documents, but they cannot be used to supplant well-pleaded allegations or to import a defendant’s factual narrative at the pleading stage.

## Conclusion

The court allowed claims to proceed that Scientific Games’ social casino apps constituted illegal gambling under Washington law, concluding that virtual coins plausibly were a “thing of value” because they extended users’ ability to play games of chance, and it rejected dismissal based on a transaction-based exemption while limiting the use of external materials on a motion to dismiss.


Fife v. Sci. Games Corp., No. 2:18-cv-00565-RBL, 2018 WL 6620485 (W.D. Wash. Dec. 18, 2018)