New Lawsuit Highlights Roblox’s Involvement in Underage Gambling

Posted on: August 18, 2023, 03:18h. 

Last updated on: August 18, 2023, 03:18h.

Roblox Corp., the video game developer behind the eponymously named game, has found itself facing legal action from parents who claim that the popular online game is facilitating underage gambling. The California-based company is accused of unfairly exploiting minors for financial gain.

A PR image of the Roblox video game
A PR image of the Roblox video game. The game is the center of a lawsuit that accuses its developer of facilitating underage gambling. (Image: Roblox)

Recently, Rachel Colvin and Danielle Sass brought a lawsuit against Roblox in the US District Court for the Northern District of California. They are seeking compensation for the financial losses their children incurred while playing the game.

The lawsuit claims that Roblox’s popular metaverse, which allows users to interact with others, violates the Racketeer Influenced and Corrupt Organization Act (RICO) and unlawfully profits from the gambling industry’s growth.

Colvin and Sass argue that they were unaware that their children were participating in Roblox’s commercial space, which requires the in-game currency Robux. They have requested a jury trial for their case.

Trouble for Roblox

Roblox has faced significant criticism for failing to create a safer online environment for children. In May, BBB National Programs discovered that the company had bypassed marketing protocols intended to protect young users.

Additionally, Roblox has been accused of blurring the lines between advertisements and legitimate gaming content. Last year, the Truth in Media group filed a complaint against the company with the Federal Trade Commission for deceptive marketing.

The heart of this matter is the use of Roblox and its Robux digital currency, which holds real-world value. According to the lawsuit, each Robux is valued at $0.0125. The plaintiffs argue that underage gamers, who make up 62% of Roblox’s player base, can use their parents’ credit or debit cards to purchase Robux without any safeguards in place. Notably, Roblox has complete records of all these transactions.

After purchasing Robux, users can access external gambling websites known as virtual casinos that are not officially part of Roblox. Children can link their Robux wallet to these websites, allowing Roblox to trace electronic transactions. However, neither Roblox nor the gambling sites require age verification.

This lawsuit also names Satozuki Limited B.V., Studs Entertainment Ltd., and RBLXWild Entertainment LLC as defendants. These companies allegedly operate third-party sites where Roblux can be used for gambling or trading.

Exploiting Young Users

In addition to the aforementioned allegations, the complaint asserts that the gambling platforms actively target minors and solicit their endorsement. For example, the website BloxFlip, operated by Studs, reportedly rewarded users on TikTok with free Robux in exchange for promoting their site.

Despite Roblox’s terms and conditions explicitly prohibiting virtual gambling and the involvement of real currency, Colvin and Sass argue that the company’s guidelines are deceptive. This is because Roblox has allowed third-party gambling platforms to accept actual cash for online betting activities.

The plaintiffs believe that Roblox has the ability to dismantle this illicit gambling network but chooses not to due to its profit potential. They claim that Roblox earns millions annually by charging a substantial 30% fee for converting Robux into real-world currency.

Roblox has claimed to take the issue seriously and has a team dedicated to preventing the use of Robux for gambling purposes. However, the continued presence of BloxFlip, which launched two years ago and is still operational, contradicts this statement.

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