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US District Judge Rules Roblox Violates Unfair Competition Law and Dismisses Racketeering Claims

Roblox Roblox, a popular online platform that hosts user-generated gaming content of multiple genres, is currently being confronted with claims of facilitating underage gambling. This, in fact, is not the first time the company has faced a lawsuit claiming it fails to provide sufficient child safety measures, with the latest one launched last year in August.

According to a class of frustrated parents, the company facilitates the use of Roblox’s in-game currency, Robux, on third-party online casino platforms by underage users, thus exposing them to the potential harms of gambling. As their complaint suggested, their children had lost money as a result of wagering on these websites via the virtual funds.

The plaintiffs claim that the company has knowingly allowed the remote gaming sites to accept wagers using the Robux currency, thus profiting in the process. To convert the virtual currency to dollars, Roblox imposes a fee of 30%. As the parents described the process, Roblox users can link their in-game wallet to third-party online gaming sites, thus allowing it to keep track of transactions. Consequently, the corporation was accused of violating the Racketeer Influenced and Corrupt Organizations Act.

As reported by Courthouse News Service, on Tuesday, US District Judge Vince Chhabria, ruled that Roblox Corporation inconsiderately enabled kids to make use of the virtual currency, thus acting in violation of California’s Unfair Competition Law (UCL). However, the judge dismissed the racketeering claims.

As the judge wrote, the company was responsible for failing to provide sufficient child safety measures to avoid exposing minors to “an unreasonable risk of harm.”

Roblox Argues the Casinos Should Be Responsible for Facilitating Underage Gambling

Roblox Argues the Casinos Should Be Responsible for Facilitating Underage Gambling In response to allegations, Roblox has argued that the third-party online casinos are to be blamed for the underage gambling activity because any incurred financial losses came as a result of exchanging the virtual currency with an interactive casino, and not Roblox. Consequently, the judge rejected this argument, stating that it “misunderstands the nature of the complaint.”

As Vince Chhabria wrote, the parents have accused Roblox of knowingly “facilitating and profiting from these online casinos – that forms the basis of the UCL Claims against Roblox”.

The judge further wrote that the company failed to warn parents about the interactive casinos and that it collaborated with them by converting the virtual currency into US dollars to make a profit. He further determined that the racketeering claims must be overturned for the time being, on the grounds that further evidence would be necessary to involve the company in a RICO enterprise claim. He explained that allegations pointed to Roblox engaging in its “own primary business activities”, with no “common purpose or of organized conduct”.

In conclusion, Chhabria ordered that both parties can file amended complaints within 14 days. Neither of them has commented in the meantime.

 Author: Harrison Young

Harrison Young is an experienced writer, who started his career almost 8 years ago. Prior to joining our team at CasinoGamesPro, he worked as an editor for a small magazine.