Churchill Downs Incorporated (CDI), the former owner of social gaming studio Big Fish Games, and Aristocrat Leisure, its current owner, have entered into an agreement in principle to settle two class-action suits related to the business.The pair will create a $155m settlement fund, of which CDI will contribute $124m, with a further $31m paid in by Aristocrat, to refund players that lost money playing Big Fish’s social casino titles.
This follows a ruling by the US Court of Appeals for the Ninth Circuit, which concluded that Big Fish apps such as Big Fish Casino and Jackpot Magic Slots constituted a form of illegal gambling. This came just months after Aristocrat completed its $990m acquisition of the studio from CDI.
The ruling had been issued following a lawsuit filed by Washington State resident Cheryl Kater against CDI in 2015. She argued that, having lost $1,000 playing games, it products constituted illegal gambling under Washington law.
Churchill Downs had acquired Big Fish in a $885m deal in November 2014.
While Kater’s argument was dismissed by the Western District of Washington court, the Appeals Court decided that virtual chips “extended the privilege of playing”, meaning that they could be considered something of value.
As a result of the ruling, other operators pulled their free-to-play casino games from Washington State, while Kater filed a class action suit against the business.
