Roblox Faces Class Action Lawsuit Alleging Illegal Gambling Practices

Written by Sean O'Brien

Roblox, the popular online game platform boasting over 60 million daily users, the majority of which are under the age of 18, is being sued for allegedly facilitating illegal gambling practices. A class action lawsuit was filed against Roblox on August 15, 2023 in the District Court for the Northern District of California, asserting violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and various consumer protection laws.

The complaint alleges that Roblox allows third-party gambling entities to use their website to accept online bets with Robux, the digital currency used to purchase items within the Roblox ecosystem. By using the Roblox website, the third-party gambling entities allegedly can track bets placed by users, complete transactions using Robux, and satisfy Robux wagers in the digital casinos offered by the gambling entities. According to the complaint, this all happens under Roblox’s watch because each transaction requires approval from Roblox to proceed. And because Roblox is the exclusive provider of Robux, Roblox profits from these transactions to the detriment of its users, particularly those under the age of 18.

The plaintiffs are two parents suing individually and on behalf of their minor children. Each minor lost thousands of Robux through activities on websites operated by the third-party gambling entities (for context, 1000 Robux is equivalent to $12.50). According to the complaint, the parent plaintiffs were not aware their children were using Robux in this manner until after they suffered monetary loss. The plaintiffs are bringing the lawsuit as a class action on behalf of other parents of minors who have experienced similar losses. 

In response, Roblox filed a motion to dismiss on October 24, 2023. The motion asserts that because Roblox explicitly does not allow gambling on its platform, as stated in its terms of service, and because the third-party gambling websites are separate from the Roblox platform, the company cannot be held responsible for the actions of the gambling entities. Specifically, the motion provides several reasons, both legal and factual, for why the lawsuit should be dismissed.

A hearing on the motion to dismiss is scheduled for January 25, 2024. The court’s ruling on these issues could have repercussions for other online game publishers that offer platforms and services similar to Roblox. Stay tuned for an update early next year on how the court rules!

Sources:

Complaint, Colvin et al. v. Roblox Corp. et al., No. 3:23-cv-04146 (N.D. Cal. filed Aug. 15, 2023).

Motion to Dismiss, Colvin et al. v. Roblox Corp. et al., No. 3:23-cv-04146 (N.D. Cal. filed Oct.24, 2023).