Roblox Facilitates 'Illegal Gambling' For Minors, According To New Lawsuit (arstechnica.com) 21
An anonymous reader quotes a report from Ars Technica: A new proposed class-action lawsuit (as noticed by Bloomberg Law) accuses user-generated "metaverse" company Roblox of profiting from and helping to power third-party websites that use the platform's Robux currency for unregulated gambling activities. In doing so, the lawsuit says Roblox is effectively "work[ing] with and facilitat[ing] the Gambling Website Defendants... to offer illegal gambling opportunities to minor users." The three gambling website companies named in the lawsuit -- Satozuki, Studs Entertainment, and RBLXWild Entertainment -- allow users to connect a Roblox account and convert an existing balance of Robux virtual currency into credits on the gambling site. Those credits act like virtual casino chips that can be used for simple wagers on those sites, ranging from Blackjack to "coin flip" games.
If a player wins, they can transfer their winnings back to the Roblox platform in the form of Robux. The gambling sites use fake purchases of worthless "dummy items" to facilitate these Robux transfers, according to the lawsuit, and Roblox takes a 30 percent transaction fee both when players "cash in" and "cash out" from the gambling sites. If the player loses, the transferred Robux are retained by the gambling website through a "stock" account on the Roblox platform. In either case, the Robux can be converted back to actual money through the Developer Exchange Program. For individuals, this requires a player to be at least 13 years old, to file tax paperwork (in the US), and to have a balance of at least 30,000 Robux (currently worth $105, or $0.0035 per Robux).
The gambling websites also use the Developer Exchange Program to convert their Robux balances to real money, according to the lawsuit. And the real money involved isn't chump change, either; the lawsuit cites a claim from RBXFlip's owners that 7 billion Robux (worth over $70 million) was wagered on the site in 2021 and that the site's revenues increased 10 times in 2022. The sites are also frequently promoted by Roblox-focused social media influencers to drum up business, according to the lawsuit. Roblox's terms of service explicitly bar "experiences that include simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or in-experience items of value." But the gambling sites get around this prohibition by hosting their games away from Roblox's platform of user-created "experiences" while still using Robux transfers to take advantage of players' virtual currency balances from the platform. In a statement, Roblox said that "these are third-party sites and have no legal affiliation to Roblox whatsoever. Bad actors make illegal use of Roblox's intellectual property and branding to operate such sites in violation of our standards."
If a player wins, they can transfer their winnings back to the Roblox platform in the form of Robux. The gambling sites use fake purchases of worthless "dummy items" to facilitate these Robux transfers, according to the lawsuit, and Roblox takes a 30 percent transaction fee both when players "cash in" and "cash out" from the gambling sites. If the player loses, the transferred Robux are retained by the gambling website through a "stock" account on the Roblox platform. In either case, the Robux can be converted back to actual money through the Developer Exchange Program. For individuals, this requires a player to be at least 13 years old, to file tax paperwork (in the US), and to have a balance of at least 30,000 Robux (currently worth $105, or $0.0035 per Robux).
The gambling websites also use the Developer Exchange Program to convert their Robux balances to real money, according to the lawsuit. And the real money involved isn't chump change, either; the lawsuit cites a claim from RBXFlip's owners that 7 billion Robux (worth over $70 million) was wagered on the site in 2021 and that the site's revenues increased 10 times in 2022. The sites are also frequently promoted by Roblox-focused social media influencers to drum up business, according to the lawsuit. Roblox's terms of service explicitly bar "experiences that include simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or in-experience items of value." But the gambling sites get around this prohibition by hosting their games away from Roblox's platform of user-created "experiences" while still using Robux transfers to take advantage of players' virtual currency balances from the platform. In a statement, Roblox said that "these are third-party sites and have no legal affiliation to Roblox whatsoever. Bad actors make illegal use of Roblox's intellectual property and branding to operate such sites in violation of our standards."
Let me guess (Score:2)
The gambling site is hosted in a country that ignores judgments from American civil suits.
Robux fees and payouts make them on the hook (Score:3)
Robux fees and payouts make them on the hook for parts of this.
Re: (Score:3)
That may well be the case, but the first target should be the gambling site if at all possible. Then you go after Roblox either in a separate suit or name them as a co-defendant for opening up their payment system to the gambling site.
In this case it's only Roblox being named in the suit, at least according to the article.
Re: (Score:1)
The gambling site is hosted in a country that ignores judgments from American civil suits.
I don't understand why any country would pay attention to the endless frivolous civil suits that constantly stream from the USA.
Oh wait, dollar hegemony? Military power projection? Does it take balls to stand up to that?
Re: (Score:2)
Maybe if it's a legitimate judgment against a company that is violating civil (if not criminal) law in both countries? Can you imagine a site like this being hosted in, say, Canada?
Now swap Canada for Kazakhstan, with the company banning Kazakh users. Then you will see.
Re: (Score:2)
Maybe if it's a legitimate judgment against a company that is violating civil (if not criminal) law in both countries? Can you imagine a site like this being hosted in, say, Canada?
Now swap Canada for Kazakhstan, with the company banning Kazakh users. Then you will see.
Violating law is one thing, frivolous lawsuits from disgruntled Americans being egged on by money-hungry lawyers is another.
Remember, in the end its always the lawyers that win any lawsuit on either side of the case. Its like the legal system is a gigantic casino, the house always wins. Its rigged.
Re: (Score:2)
And yet you continue to ignore the fact that whether it is a frivolous suit is not for either one of us to decide. Whether or not it's "always the lawyers" that wins is also immaterial to this discussion since no one has even broached the subject of who stands to profit most from the action.
Re: (Score:1)
Um, yeah... better get out there and warn... oh dang, already happened [youtube.com]
Wrong problem (Score:3)
So Roblox take 30% of your "money" on the way out and another 30% on the way in. You lose ~50% when you break even. Somehow people think the gambling part is the problem?
Considering all the complexity involved the target audience is apparently people smart enough to set up all these transfers but dumb enough to not comprehend the odds of coming out ahead.
Let's be honest here, this has nothing to do with kids and is actually about money laundering and legal parasites who got the scent of free money.
Re: (Score:2)
So Roblox take 30% of your "money" on the way out and another 30% on the way in. You lose ~50% when you break even. Somehow people think the gambling part is the problem?
That's exactly how gambling works. The house always takes it's cut. They're just taking a larger cut than usual.
Considering all the complexity involved the target audience is apparently people smart enough to set up all these transfers but dumb enough to not comprehend the odds of coming out ahead.
Let's be honest here, this has nothing to do with kids and is actually about money laundering and legal parasites who got the scent of free money.
Erm... except it has everything to do with targeting kids. If this game was 18+ and had strict rules about proving it, no-one would give a fat rats arse (well the anti-gambling nutters, but no-one cares what they have to say).
Re: (Score:2)
You can't use this method without a verified account on the "adult site", so again, not about kids. If said "kids" can get an account on "adult site" then sue that site and leave Roblox out of it.
It's pretty obvious Roblox aren't "working with" the sites. If they were there would be a better funds transfer method than "buy fake items".
It's basically the same as blaming an art gallery for money laundering or a car maker for a bank heist. Just because your thing can do something it wasn't intended for doesn't
Re: (Score:1)
Just discovered that your mom takes robux as payment.
BeauHD is a gambling scam proponent (Score:1)
I wonder what percentage of BeauHD's income is from manipulating crypto prices?