Roblox Faces Legal Battle Over Allegations of Illegal Gambling

Roblox Faces Legal Battle Over Allegations of Illegal Gambling

A California federal judge has given the green light for proposed class claims against Roblox Corp., a gaming giant, alleging violations of California law by facilitating illegal gambling activities aimed at m

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inors. However, the judge dismissed other claims, including those under racketeering and New York business law.

Negligence and Unfair Competition Claims Allowed to Proceed

U.S. District Judge Vince Chhabria ruled that parents of minors who made in-game purchases in Roblox had sufficiently alleged negligence and violations of California’s unfair competition law. The plaintiffs accused Roblox of negligently allowing minors to engage in gambling-like activities by exchanging in-game currency, known as “Robux,” with third-party digital casinos.

Robux: A Thing of Value

Judge Chhabria rejected Roblox’s argument that Robux, the in-game currency, lacked inherent value. The court emphasized that virtual gambling chips, including Robux, could be exchanged for real currency through Roblox’s developer exchange program, where the company takes a 30% commission.

Roblox Needs To Face Calif. Law Claims Over Illegal Gambling: Ambiguity Surrounds Allegations

While dismissing some claims, Judge Chhabria noted ambiguity in the plaintiffs’ allegations. The complaint lacked specificity in proving Roblox’s direct involvement in operating gambling rings, but the judge emphasized that certain laws clearly applied to Roblox’s alleged role in facilitating such activities.

Legal Setbacks and Defenses

The court entered defaults against two online casinos, highlighting the legal challenges faced by the plaintiffs. Roblox’s defense focused on refuting claims of misrepresentation and racketeering, arguing that mere knowledge of third-party activities didn’t implicate the company in illegal conduct.

Roblox Needs To Face Calif. Law Claims Over Illegal Gambling: Future Legal Proceedings

Roblox’s spokesperson emphasized the dismissal of several claims, underscoring the plaintiffs’ burden of proof. The legal battle is far from over as both parties prepare to present their cases in court.

Legal Representation

The plaintiffs are represented by legal teams from Weitz & Luxenberg PC and Johnson Firm, while Roblox is represented by Cooley LLP.