Cheryl Kater, individually and on behalf of all others similarly situated, Plaintiff-Appellant,
Churchill Downs Incorporated, a Kentucky corporation, Defendant-Appellee.
and Submitted February 6, 2018 Seattle, Washington
from the United States District Court for the Western
District of Washington D.C. No. 2:15-cv-00612-MJP Marsha J.
Pechman, Senior District Judge, Presiding
Alexander G. Tievsky (argued), Roger Perlstadt, and Ryan D.
Andrews, Edelson PC, Chicago, Illinois, for
Matthew R. Berry (argued), Susman Godfrey L.L.P, Seattle,
Washington; Robert Rivera, Susman Godfrey L.L.P., Houston,
Texas; for Defendant-Appellee.
Before: MILAN D. SMITH, JR. and MARY H. MURGUIA, Circuit
Judges, and EDUARDO C. ROBRENO, [*] District Judge.
panel reversed the district court's dismissal of a
purported class action against Churchill Downs alleging
violations of Washington's Recovery of Money Lost at
Gambling Act and Consumer Protection Act, and unjust
enrichment; and held that Churchill Downs' virtual game
platform "Big Fish Casino" constituted illegal
gambling under Washington law.
online or virtual gambling is illegal in Washington. Big Fish
Casino's virtual chips have no monetary value and could
not be exchanged for cash, but Big Fish Casino did contain a
mechanism for transferring chips between users, which could
be used to "cash out" winnings.
panel held that the virtual chips extended the privilege of
playing Big Fish Casino, and fell within Wash. Rev. Code
§ 9.46.0285's definition of a "thing of
value." The panel concluded that Big Fish Casino fell
within Washington's definition of an illegal gambling
game. See Wash. Rev. Code § 9.46.0237.
panel held that plaintiff Cheryl Kater stated a cause of
action under Recovery of Money Lost at Gambling Act where she
alleged that she lost over $1, 000 worth of virtual chips
while playing Big Fish Casino, and she could recover the
value of those lost chips from Churchill Downs, as proprietor
of Big Fish Casino, pursuant to Wash. Rev. Stat. §
D. Smith, Jr., Judge
appeal, we consider whether the virtual game platform
"Big Fish Casino" constitutes illegal gambling
under Washington law. Defendant-Appellee Churchill Downs, the
game's owner and operator, has made millions of dollars
off of Big Fish Casino. However, despite collecting millions
in revenue, Churchill Downs, like Captain Renault in
Casablanca, purports to be shocked- shocked!-to find
that Big Fish Casino could constitute illegal gambling. We
are not. We therefore reverse the district court and hold
that because Big Fish Casino's virtual chips are a
"thing of value, " Big Fish Casino constitutes
illegal gambling under Washington law.