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Federal Judge Greenlights Roblox Gambling Court Case
By Shane Addinall Apr 28, 2024 EntertainmentA federal judge has ordered Roblox developers to stand trial for illegal games of chance that use their bespoke virtual currency purchasing process. Join us as we learn about the platform, its currency, and how online gambling became a problem.Popular gaming platform Roblox is once again facing legal action due to allegations that casino games and other games of chance are available to its users. The company recently lost its appeal to dismiss the case with a California-based federal judge feeling that it has enough merit to continue to trial.
Join us as we investigate the basis of these allegations and why a platform without the option to pay real money winnings is coming under fire for illegal gambling.
What is Roblox?
Roblox is not just another online game. It's a unique online platform created by David Baszucki and Erik Cassel that serves as a creation engine. Here, users are not just players. They are creators who design and develop video games for other Roblox users to enjoy.
The platform is also considered a pseudo-social media site. While claiming this accolade was not part of its business strategy, the site processes millions of direct and private messages daily.
Like any online development platform, Roblox grapples with the ongoing challenge of monetisation. Despite boasting over 50 million daily users and generating nearly $2.8 billion in 2023, the platform has yet to turn a profit.
Ongoing Monetisation Challenges
The site's biggest strength is also at the centre of its biggest challenge. While its focus on user-generated games and voxel design aesthetic are instant hits with millions of users, the problem is that the lion's share of them are under the age of seventeen.
A 2023 report by Statista shows the following age breakdown:
However, the majority of Roblox's user base is under the age of seventeen, which poses a significant challenge. This demographic limitation not only hampers the company's financial growth but also restricts the types of businesses it can collaborate with. A platform with a more significant adult population could have explored virtual casinos and creative games of chance, but the current user base doesn't allow for such ventures.
The Buck Stops with Roblox
The platform does allow players to buy an internal currency called Robux. These tokens are used to purchase in-app skins and items used in games, which is perfectly acceptable for a free gaming platform looking to recoup the cost of hosting this expansive selection of games.
Sadly, unscrupulous casino software developers emulate the look and feel of Roblox on third-party websites that offer voxel video slots and other casino games. Youthful players are encouraged to purchase Robux on the platform and are then directed offsite to these virtual gambling sites where they use their tokens to play what amounts to social casino games (as they offer no cash prizes).
Roblox lawyers argue they are not responsible for what third-party developers do:
Quote"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."
A class action lawsuit has been filed against Roblox, accusing the company of directly benefiting from underage gambling. The suit further alleges that it's highly unlikely that the company is unaware of these external illegal gambling sites. This serious accusation is why the federal judge believes the plaintiffs deserve their day in court.
Quote“Throughout this process, Roblox keeps track of all these electronic transfers and has knowledge of each transfer that occurs in its ecosystem.”
Roblox receives a 30% cut of the Robux tokens these Game developers "cash out" in exchange for their payment.
The advanced technology, regional reporting, and financial incentive that underpins an enterprise like Roblox is why the federal judge feels the plaintiffs deserve their day in court.
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