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Aristocrat reaches out-of-court settlement in Washington social gaming case

Are social gaming sites offering games of skill or games of chance? That’s a question that remains unanswered as Aristocrat, the Australian owner of social casino giant Big Fish Games reached an out-of-court settlement with plaintiffs in Washington State, rather than gambling with the the outcome of a jury trial on the matter.

Aristocrat’s troubles in Washington State almost immediately after it shelled out a whopping $1 billion to acquire Big Fish Games from Churchill Downs Incorporated back in 2017. At the time, the purchase seemed like a pretty decent investment as Big Fish was the industry leader in social gaming and casinos and seemed poised to stay that way for a very long time. But the ink had barely dried on the contract when a group of aggrieved Washington gamblers took Big Fish to court saying that because the social gaming site sold virtual chips, it was offering something of value for games of chance and was therefore an unlicensed casino. The implications for the entire social gaming industry appeared dire until the settlement was reached.

In the settlement, Aristocrat agreed to pay out $31 million while Churchill Down covers $124 million of the $155 million payout to the plaintiffs and their attorneys. A Churchill Downs representative described the company’s portion of the deal in a press release saying, “Aristocrat has agreed to specifically release CDI of any and all indemnification obligations under the Stock Purchase Agreement dated November 29, 2017, between CDI, Aristocrat, and Big Fish Games, Inc. arising from or related to the Kater and Thimmegowda Litigations, including any claims of diminution of value of Big Fish Games, Inc. and any claims by any person who opts out of the proposed class settlement.”

The proposed settlement is still subject to approval by the judge in the case.