Roblox Accused of Facilitating Illegal Gambling in Class-Action Lawsuit

Roblox, a user-generated “metaverse” company, is facing a proposed class-action lawsuit that accuses it of profiting from and aiding third-party websites that allegedly use the platform’s Robux currency for unregulated gambling activities. The lawsuit alleges that Roblox is indirectly facilitating illegal gambling opportunities for minor users.

The lawsuit names three gambling website companies – Satozuki, Studs Entertainment, and RBLXWild Entertainment. These sites allow users to link a Roblox account and convert their Robux virtual currency into credits for gambling, similar to casino chips. The games offered range from Blackjack to “coin flip” games. The lawsuit outlines that if a player wins, they can transfer their winnings back to the Roblox platform in Robux form. The gambling sites allegedly use fake purchases of worthless “dummy items” to facilitate these transfers, and Roblox takes a 30 percent transaction fee both when players “cash in” and “cash out” from the gambling sites. If the player loses, the transferred Robux are retained by the gambling website through a “stock” account on the Roblox platform.

The Robux can then be converted back to real money through the Developer Exchange Program. This process requires the player to be at least 13 years old, file tax paperwork (in the U.S.), and have a balance of at least 30,000 Robux (currently valued at $105). The gambling websites also use the Developer Exchange Program to convert their Robux balances to real money. The lawsuit cites a claim from RBXFlip’s owners that 7 billion Robux (worth over $70 million) was wagered on the site in 2021 and that the site’s revenues increased tenfold in 2022. The sites are often promoted by Roblox-focused social media influencers, according to the lawsuit. Roblox’s terms of service explicitly prohibit “experiences that include simulated gambling,” but the gambling sites allegedly circumvent this prohibition by hosting their games off Roblox’s platform while still using Robux transfers.

This has raised concerns among parents who purchase Robux for their children, believing they’re being used for in-game cosmetics and other gameplay items. The lawsuit cites two parents who claim their children have lost “thousands of Robux” to the gambling sites, which allegedly lack effective age-verification controls. The lawsuit alleges that Roblox, through its maintenance of the Robux currency platform, “monitors and records each of these illegal transactions, yet does nothing to prevent them from happening.” The lawsuit accuses Roblox of tacitly approving the use of Robux for gambling, which it claims is a violation of the federal RICO act, California’s Unfair Competition Law, and New York’s General Business Law, among other alleged violations.

In response, Roblox told Bloomberg Law that “these are third-party sites and have no legal affiliation to Roblox whatsoever. Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards.” This is not the first instance of a game platform facing legal issues over its virtual currency being used for gambling. In 2016, Valve faced a lawsuit and government scrutiny from Washington state over third-party sites that used Counter-Strike skins as currency for gambling games. The lawsuit against Steam was eventually dismissed last year.

Amanda Reynolds

Amanda Reynolds is a passionate writer who recently graduated from journalism school, ready to make her mark in the world of technology and gaming. With a deep love for both fields, Amanda possesses a unique ability to blend her technical knowledge with her exceptional storytelling skills, captivating readers with engaging and informative content. Having grown up immersed in the world of video games, Amanda developed a profound understanding of the intricate mechanics and immersive narratives that make gaming a compelling art form. Her extensive experience playing a wide variety of genres enables her to provide insightful analysis and reviews, highlighting the strengths and weaknesses of each game while delving into the larger cultural impact they have on society. In addition to gaming, Amanda's fascination with technology led her to explore the ever-evolving landscape of digital innovations. She stays up to date with the latest gadgets, software advancements, and tech trends, allowing her to translate complex concepts into accessible articles that resonate with readers of all backgrounds. Amanda's enthusiasm for technology extends beyond the mere product reviews, as she explores the transformative potential of emerging technologies like artificial intelligence, virtual reality, and blockchain.

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