Parents’ Lawsuit Against Roblox Raises Responsible Gambling Concerns

Written By Adam Hensley on July 3, 2024 - Last Updated on October 25, 2024
Roblox home screen. The company faces a lawsuit in California over its currency being used at gambling sites.

Roblox, a California-based online gaming platform, is in hot water after parents said their children were using the game’s currency at third-party virtual casinos.

A group of parents has filed a lawsuit claiming the company should have provided a responsible gaming warning regarding these online casinos.

Roblox isn’t a gambling operator by any means. But it allegedly monitored transactions that resulted in underage gaming and did nothing. Given the heightened emphasis on responsible gambling across the country, it’s clear the company could have done things differently.

Here’s a closer look at the lawsuit, a recent hearing, and what this means going forward.

Lawsuit claims Roblox enabled children to gamble

The class-action lawsuit claimed that Roblox was essentially acting as an illegal gambling ring for minors because children were using its in-game currency, Robux, on third-party gambling sites.

According to the suit, Roblox was aware of what was going on and knowingly allowed these gambling sites to accept its game currency. The parents argue that the company should have provided some sort of warning or message about gambling.

Robux can be purchased with either credit cards or gift cards. A user can go to a third-party online casino and link their virtual Roblox wallet to the gaming website. The gambling site will then convert the Robux currency into online casino credits.

“Throughout this process, Roblox keeps track of all of these electronic transfers and has knowledge of each transfer that occurs in its ecosystem,” the lawsuit reads.

Roblox had a motive, too, the parents say: The company charges a 30% fee to convert Robux into real dollars, making millions in the process.

The lawsuit claims Roblox violated the Racketeer Influenced and Corrupt Organizations Act, better known as RICO.

In a recent hearing, US District Judge Vince Chhabria tossed out the racketeering charges. However, he ruled that Roblox both neglected and violated California’s Unfair Competition Law.

“The baseline rule is that Roblox had a duty to use reasonable care in its conduct, the creation and management of its platform, to avoid creating an unreasonable risk of harm to others,” the judge wrote.

What arguments were made against Roblox?

The parents’ main grievance is the lack of clear communication from Roblox regarding the ability to gamble with its in-game currency. They believe the company had ample opportunity to provide messaging on responsible gambling but chose not to.

Chhabria asked plaintiff’s lawyer Ezekiel Ward to clarify this argument, specifically, Paragraph 15 of the lawsuit, which speculates about that communication — or the lack thereof.

“It adequately establishes that there were instances in which the children necessarily communicated with Roblox, and where if Roblox had made these disclosures about gambling, children would have seen them and would have been able to rely on them,” Ward said.

How did Roblox respond?

Roblox asserts that it was not to blame for the children’s gambling. The company claims that since the gambling and financial losses took place on platforms other than its own, it is not responsible, court documents show.

Chhabria responded to these claims, writing that the organization “misunderstands the nature of the complaint.”

Tiana Demas, counsel for Roblox, said there were warnings about responsible gaming on the third-party sites.

“The problem is the complaint doesn’t allege fraud on the children, nor could the court logically draw that inference, because the complaint is littered with screenshots from the virtual casinos that the children allegedly went to that say ‘You have to be 18 or older,'” Demas argued. “That provided examples of clear disclosures that the children would have seen or ignored.”

California operators are required to promote responsible gaming

Just because the RICO charges have been thrown out doesn’t mean Roblox is off the hook.

Chhabria said it was “hard to swallow” the notion that the company didn’t have a responsibility to prevent harm to its customers. “The idea that you have no duty to protect the people who you invite in and make a bunch of money off of when they participate in this virtual world seems strange to me,” he said.

Roblox likely will face legal consequences for its actions; Chhabria did say that the company was negligent.

The case serves as a reminder of the dangers of problem gaming and the importance of promoting responsible gambling.

No, children were not gambling on the Roblox platform itself. But the company failed to warn its underage population of the dangers of gambling when it was aware of these transactions.

In California, where Roblox is headquartered, gambling providers must take action to promote responsible gaming. If they don’t, they could lose their license to operate in the state.

Gambling is becoming less taboo, and children’s exposure to it is at an all-time high. Especially with mobile gaming, minors have easier access to gambling now than in years past. Companies have a duty to make sure their younger users are safe, and that includes Roblox.

Photo by Leon Keith / AP Images
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Adam Hensley

Adam Hensley is a journalist with experience covering online sports betting and gambling across Catena Media. His byline has appeared in the Associated Press, Sports Illustrated and sites within the USA Today Network.

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