A federal judge in Northern California has authorized a class-action lawsuit accusing the mobile game platform Roblox of promoting underage gambling. The lawsuit, initiated by a group of concerned parents, alleges that Roblox has knowingly permitted third-party gambling sites to accept bets using Robux, the platform’s in-game currency. These parents assert that their children lost money while engaging with virtual casinos that use Robux.
Roblox, an immensely popular online game platform and game creation system, allows users to explore a vast array of user-created games. While the platform itself is free to play, users can purchase Robux with real money for in-game transactions. As of August 2020, Roblox boasted over 164 million active users, with more than half of all American children under the age of 16 participating on the platform. According to a February 2022 SEC filing, 60% of Roblox users are under 16, with 23% of those users aged between 9-12, and 22% under the age of nine.
The parents who filed the lawsuit in August 2023 claim that Roblox incentivizes third-party developers to create experiences incorporating Robux. These developers can exchange the Robux they collect for real currency, a process from which Roblox takes a 30% commission. In a ruling last Thursday, U.S. District Judge Vince Chhabria ruled that Roblox had a duty to protect its users and had engaged in misfeasance.
“The plaintiffs allege that Roblox has created a clearinghouse for illegal transactions within the virtual playground, and that Roblox facilitates those transactions and profits from them,” Chhabria wrote. “They allege that these deliberate design decisions by Roblox created the risk of harm to the minor plaintiffs who otherwise would not have been exposed to the virtual casinos.”
Judge Chhabria noted that because of the Robux commission structure, it was “entirely foreseeable” that third-party developers would be driven to create highly addictive experiences like gambling games. According to the complaint, these virtual casinos were well known to both users and Roblox itself. For example, three virtual casinos named in the suit had launched significant marketing campaigns, prominent Roblox social media influencers discussed or endorsed these virtual casinos, and one such casino, Bloxflip, reportedly had over 5.7 million monthly visitors in 2022.
“Roblox knew how these virtual casinos operated and could foresee the probability that minors would navigate to these sites and gamble their Robux away,” Chhabria added.
However, Judge Chhabria dismissed additional fraud claims against Roblox, concluding that the plaintiffs had failed to convincingly argue that part of the case.
