A federal judge has ruled that Roblox was negligent after it facilitated kids using in-game currency to gamble at third-party casino sites. [Image: Shutterstock.com]

A serious issue

A federal judge in San Francisco has ruled that Roblox allowed kids to use its in-game currency to gamble online. The decision on Tuesday from US District Judge Vincent Chhabria relates to a class-action lawsuit dating back to August 2023.

made millions of dollars as a result of the 30% commission it charges

A group of parents made the claims against the online video game. They allege that Roblox knew children were using its virtual currency to gamble and made millions of dollars as a result of the 30% commission it charges when gambling platforms convert the tokens back into fiat currency.

The judge dismissed claims of racketeering as the plaintiffs failed to provide sufficient proof that the company was engaged in a criminal enterprise, but he did agree that the gaming platform breached Unfair Competition Law in California. Judge Chhabria noted that Roblox had a “duty to use reasonable care” with all aspects of its platform and to not put users at unreasonable risk.

Profiting from the gambling

Roblox contended that the blame should rest on the online casinos since this is where the children suffered their monetary losses rather than on the video game platform. Judge Chhabria, however, disagreed, arguing that Roblox had a role to play in the losses as it knowingly facilitated and profited from the gambling.

Roblox is a free online gaming platform that allows its 60 million daily active users, most of whom are underage, to interact with each other, play games, and buy items within a virtual world.

Its failure to tell parents about the link to online casinos or explain the business model of getting 30% of the conversion of the Robux currency means that the company was negligent. The next step in this case is discovery and both sides have 14 days to submit amended complaints.

Concerning aspects of the case

Roblox users can purchase Robux using US dollars, with the base package costing $4.99 for 400 tokens. Subscribers can get a better conversion rate.

does not carry out any age verification checks on new signups

All of the online casinos that accepted Robux as a form of currency are not licensed in the US, with RBXFlip one of the first significant third-party gambling platforms to support this token. It does not carry out any age verification checks on new signups.

Roblox’s community standards prohibit most forms of gambling in the virtual world, whether this is through the use of real money, in-game items, or Robux. One big exception is the presence of controversial loot boxes in many of the platform’s games, which is something that certain countries no longer allow due to their similarities to gambling.