A software developer who created a program in which users of the Roblox gaming platform – primarily children – can essentially gamble their “Robux” game currency can’t sidestep a class action lawsuit accusing him of running what amounts to an illegal gambling operation under California law, a San Francisco federal judge has ruled.
In the ruling, however, U.S. District Judge Vince Chhabria said the decision is based on a strict and rather begrudging interpretation of California law, and the judge urged California state lawmakers to rewrite state law to “clean up” the rules to make clear if they intend for this result.
Judge Chhabria dealt the ruling on Dec. 10. It came as the latest development in a court fight that dates back to 2023.
The lawsuit was filed by attorneys with the firms of Weitz & Luxenberg, of New York; Jennings PLLC, of Little Rock, Arkansas; Gibbs Mura LLP, of Oakland; Audet & Partners, of San Francisco; Levin Sedran & Berman, of Philadelphia; Leeds Brown Law, of Carle Place, New York; and Sultzer & Lipari, of Poughkeepsie, New York.
The lawsuit was filed against San Mateo-based Roblox Corporation, which owns and operates the Roblox online gaming platform and a group of others who have developed and operate other games and “exchange” sites that operate alongside the Roblox platform.
Those other sites are not owned by Roblox. But they allow users of Roblox to use their “Robux” – virtual currency that can be earned, purchased and used on the Roblox platforms and other sites operating alongside the Roblox platform – to engage in games of chance and other ventures.
In the lawsuit, the plaintiffs asserted the associated sites amount to “an illegal gambling operation that is preying on children nationwide.”
In late October, after more than two years in court, Roblox won an order from Chhabria dismissing some of the claims against them. In that ruling, Chhabria said the platform operator couldn’t be held accountable under California or federal laws for the allegedly improper actions of developers of user-generated sites, even if the sites are designed to essentially run on Robux, a virtual currency created by Roblox and exclusively honored on the gaming platform.
At the same time, the judge was considering motions to dismiss from those other developers.
Among those motions, developer Boris Said Jr. asked the court to dismiss the claims against him and the now-defunct site he created known as RBLXWild.
That website “hosted gambling games, such as coin flips, blackjack, and plinko,” which accepted Robux. According to court documents, RBLXWild was then able to exchange the Robux for cash through Roblox’s Developer Exchange Program, generating “up to ‘five figures a day’ in revenue before it shut down in response to the filing of this lawsuit.”
According to court documents, plaintiffs in the lawsuit include “children who gambled away their Robux on RBLXWild.”
In his motion to dismiss, Said asserted he can’t be sued using California state laws that regulate gambling, in part, because his site dealt in Robux and not actual U.S. currency or other “things of value.”
In his ruling, however, Chhabria disagreed, saying that his reading of California law means Robux are indeed “things of value.”
In the ruling, the judge compared Robux to “arcade tokens.”
“Once purchased, they can be exchanged for something a user values: playing games, either in a physical arcade or on a website. If someone steals an arcade customer’s tokens, they are stealing something of value, because the customer would need to spend more money to restore their ability to play games at the arcade,” Chhabria wrote.
“Similarly, if someone hacks into a Roblox user’s account and steals their Robux, they are stealing something of value, and the user could sue them for theft.”
For those reasons, Chhabria said the lawsuit can continue against Said and his company.
However, in the ruling, Chhabria said California’s laws on the subject need further revision in light of modern technology, such as the Roblox platform. He said the problem lies in the difficulty in defining “things of value” under California law for such virtual non-cash currency and games.
“In short, the Penal Code provisions, considered together, leave the reader totally confused about the meaning of the phrase ‘thing of value.’ In particular, it’s difficult to discern whether simple rewards of extended gameplay, or even tokens that can be exchanged for cash, fall within the ambit of this phrase,” the judge said.
But he said under the current language, “ultimately … there is no plausible interpretation of the phrase ‘thing of value’ that would not cover Robux.”
He urged California state lawmakers to change the law to address his concerns.
According to the court docket, the case is already ticketed for the U.S. Ninth Circuit Court of Appeals, as both Said and other developer defendants have appealed prior rulings in the case.
Said is represented in the action by attorneys David Clark and Kevin Crisp, of the firm of Haynes & Boone, of Costa Mesa.
