Class Action Claims Roblox, Casino Websites Operate Illegal Gambling Ring ‘Targeted at Children’

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A proposed class action claims Roblox Corporation has conspired with the operators of three gambling websites to facilitate an illegal gambling enterprise targeted at children through Roblox’s online gaming platform and digital currency.

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The 55-page lawsuit says that the purportedly illegal gambling ring is maintained by Roblox and “co-conspirators” Satozuki Limited B.V., Studs Entertainment Ltd. and RBLXWild Entertainment LLC, which operate the popular casino websites RBXFlip, Bloxflip and RBLXWild, respectively.

Roblox, a free online gaming platform and the largest entertainment website in the world for children, allows users to interact, play games and purchase items for use within its virtual universe with a digital currency called “Robux,” the suit explains.

The case alleges that Roblox “knowingly and intentionally” facilitates access to third-party gambling websites for minor users by enabling its co-defendants to operate on the Roblox platform and allowing Robux to be used to place bets in their virtual casinos. Together, the complaint argues, the defendants have assisted in the creation of an “unregulated market of virtual casino games that run adjacent to and rely on the Roblox platform.”

Moreover, contrary to its terms of service, which purport that the website prohibits “simulated gambling” or the exchange of real money, Roblox also supports its co-defendants’ efforts to “track bets, complete transactions, wager Robux, and satisfy wagers in their digital casinos,” the filing claims. The lawsuit contests that despite Roblox’s representations, every illegal gambling transaction occurs “under Roblox’s virtual roof” and is fully overseen by the platform.

As the suit tells it, the defendants’ illegal gambling operation “prey[s] on children nationwide” by targeting the adolescents and teenagers who constitute the vast majority of Roblox’s 60 million daily users.

The process begins after a minor user purchases Robux on the Roblox website, the case says. Per the complaint, one Robux is currently equal to $0.0125, and users can buy 400 Robux for $4.99 or 800 for $9.99, or subscribe to receive a monthly allowance of the currency.

The user must then navigate to a third-party online casino such as RBXFlip, Bloxflip or RBLXWild, which are hosted outside of the Roblox universe, the filing relays. If the consumer links their Robux wallet on Roblox’s platform to the gambling website, the third party will convert the Robux into credits that can be wagered in its virtual casino, the lawsuit explains.

According to the suit, Roblox tracks each of these electronic transfers throughout this process and “knowingly” allows them to occur within its network.

“Importantly, while a minor user must navigate off Roblox’s website to access the online casino and their new digital gambling credits, in reality the minor user’s Robux have not been converted to another currency and they never leave Roblox’s website,” the case summarizes. “Instead, the [online casinos] merely take control of the Robux, while providing a corresponding number of ‘credits’ (which are also called Robux) on their third-party gambling websites.”

These credits work “just like chips in a brick and mortar casino,” the complaint states. After “buying in” with Robux, a user can gamble until they lose their money or cash out their credits, which are paid out in the form of Robux, the filing says.

Sadly, the dangers presented by the defendants’ actions often go unnoticed by parents or guardians of minors who use Roblox, the lawsuit claims.

“Many times, children are able to gamble money on these virtual casinos without their parents’ knowledge because they use Robux to facilitate the gambling transactions,” the suit reads. “Parents unwittingly provide the gambling funds to their children under the mistaken belief that their children are using Robux to purchase items that will enhance or accessorize a legitimate and/or harmless gaming experience.”

To make matters worse, Roblox takes a 30 percent commission on all user-to-user transactions made on its platform, including all deposits or withdrawals made to and from the third-party casino websites, the case adds. Thanks to these fees, the complaint alleges, Roblox has likely earned “hundreds of millions in real-world revenue” on transactions linked to illegal gambling.

As a result of cases like those of the plaintiffs, whose minor children apparently lost thousands of Robux gambling on the illegal casino websites, the operators of RBXFlip, Bloxflip and RBLXWild have collected millions of dollars “off the backs of those too young to legally gamble, all the while providing Roblox with a sizable cut of the money they’ve illegally obtained,” the filing scathes.

The lawsuit looks to represent anyone in the United States who, during the applicable statute of limitations period, is or was the parent and/or legal guardian of a minor who acquired Robux through the Roblox platform and wagered and lost some or all of those Robux on RBXFlip, Bloxflip or RBLXWild.

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