Gaming Platform Roblox Sued For Facilitating Underage Gambling

The popular online kids’ gaming platform Roblox is being sued for illegally facilitating and profiting from underage gambling.

A California class action lawsuit, filed by parents Rachel Colvin and Danielle Sass, accuses Roblox Corp. of directly violating the Racketeer Influenced and Corrupt Organisations Act. The parents allege that their children used Roblox currency, known as Robux, to gamble on third-party websites accessed through Roblox.

Underage Roblox players are gambling with digital Robux currency

Roblox is an online platform that features thousands of virtual games for children and teenagers. It’s welcomed millions of downloads since its 2006 debut. Now, anyone with a niece, nephew, or kid of their own has likely heard of the brand.

Colvin and Sass say their sons, both named as minor plaintiffs in the suit, are victims in “an illegal gambling operation that is preying on children nationwide.” Their children have lost thousands of Robux while gambling on these sites — all without the approval of a consenting adult. For context, Roblox currently sells 800 Robux for $9.99. That’s a monetary value of roughly $0.0125 per Robux.

The lawsuit was filed Aug. 15 in the US District Court’s Northern District of California and remains under investigation.

Colvin et al v. Roblox Corporation et al

Rather than being a game in the conventional sense of the word, Roblox offers a collection of virtual experiences created by various developers. These in-platform games can depict objects like casinos and card dealers, but they can’t explicitly offer gambling.

According to its terms of service:

“Experiences that include simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or in-experience items of value are not allowed.”

But the lawsuit says those terms offer parents and users a misleading sense of security. In reality, Roblox skirts these terms by directing players to third-party gambling sites where they can use Robux to play games of chance, like slots, blackjack, and roulette.

Roblox could ban such sites and prohibit them from accepting Robux as a betting method. Instead, said the lawsuit, Roblox continues to charge a 30% transaction fee, raking in millions in illegal funds.

In response, Roblox Corporate Communications Director Cris Paden confirmed that these sites do, in fact, violate the platform’s terms of service. Roblox says its team remains dedicated to ensuring community safety by investigating potentially predatory sites like the ones at issue. However, it’s unclear whether Roblox has issued any repercussions, as litigations are still pending.

Loot boxes remain legal on Roblox

Gambling may not be permitted outright on the platform, but Roblox does advertise loot boxes — virtual treasure chests with a proven link to problem gambling. Players use real money to purchase in-game currency that can then be used to buy these loot boxes, giving players a chance to snag custom game content. Loot boxes are legal in the US for now, but they’re already banned in the Netherlands and Belgium, and they’re facing major crackdowns in the UK. Similarly, players can purchase “limiteds,” or special in-game items available in limited quantities.

These limiteds and loot boxes allow developers to upsell players and profit from an additional in-game revenue stream. It’s a marketing tactic that might be permitted for adult audiences. But when it comes to kids, the strategy becomes questionable, at best.

Social media users call attention to underage Roblox gambling

Colvin and Sass claim Roblox has been aware of such affairs for at least four years, calling attention to multiple social media posts from players and influencers.

Social media user KreekCraft was one of the first to call attention to the situation in 2019, saying:

Heard a lot about rblxflip today. For the people unaware it’s a Roblox robux gambling site.

1. It is ILLEGAL for anyone not an adult to gamble. Being this site is marketed towards Roblox, ie KIDS, I wouldn’t be surprised if it got shut down.

2. Don’t use it. You’ll be banned.

— KreekCraft (@KreekCraft) April 15, 2019

But RBXFlip has yet to shut its digital doors, and KreekCraft’s concerns from four years ago are still entirely valid today. A quick Youtube search reveals some of the most popular Robux videos, featuring titles like “GAMBLING 10 MILLION ROBUX” and “How to gamble your Robux.”

RBXFlip is just one of the gambling sites named alongside Roblox in this lawsuit. The site touts a variety of “fun and fair games”. But in reality, these selections are merely predatory games of chance.

Other sites named in the lawsuit include:

• Bloxflip
• RBLXWild Entertainment
• Satozuki Limited BV
• Studs Entertainment

Underage gambling makes the news again

Scrutiny is far from a new issue for the platform. The Federal Trade Commission has received over 1,000 complaints concerning Roblox. These grievances include concerns over deceptive advertising, limited customer service, and a failure to protect children and players.

One of the most recurring complaints involved the lack of discernability between actual content and advertisements on the Roblox platform.

Fortunately for Roblox, underage gambling seems to be an issue that garners minimal action. The topic has seen similar rug-sweeping in Iowa lately, as multiple Iowa and Iowa State athletes undergo investigations for NCAA gambling violations.

The plaintiffs in this latest Roblox suit, represented by Weitz & Luxenberg, PC and Johnson Firm, have requested a trial by jury. Perhaps in the hands of a jury, the rising issue of underage gambling will finally see the light of day.