Roblox Facilitates ‘Illegal Gambling’ For Minors, According To New Lawsuit

An anonymous reader quotes a report from Ars Technica: A new proposed class-action lawsuit (as noticed by Bloomberg Law) accuses user-generated “metaverse” company Roblox of profiting from and helping to power third-party websites that use the platform’s Robux currency for unregulated gambling activities. In doing so, the lawsuit says Roblox is effectively “work[ing] with and facilitat[ing] the Gambling Website Defendants… to offer illegal gambling opportunities to minor users.” The three gambling website companies named in the lawsuit — Satozuki, Studs Entertainment, and RBLXWild Entertainment — allow users to connect a Roblox account and convert an existing balance of Robux virtual currency into credits on the gambling site. Those credits act like virtual casino chips that can be used for simple wagers on those sites, ranging from Blackjack to “coin flip” games.

If a player wins, they can transfer their winnings back to the Roblox platform in the form of Robux. The gambling sites use fake purchases of worthless “dummy items” to facilitate these Robux transfers, according to the lawsuit, and Roblox takes a 30 percent transaction fee both when players “cash in” and “cash out” from the gambling sites. If the player loses, the transferred Robux are retained by the gambling website through a “stock” account on the Roblox platform. In either case, the Robux can be converted back to actual money through the Developer Exchange Program. For individuals, this requires a player to be at least 13 years old, to file tax paperwork (in the US), and to have a balance of at least 30,000 Robux (currently worth $105, or $0.0035 per Robux).

The gambling websites also use the Developer Exchange Program to convert their Robux balances to real money, according to the lawsuit. And the real money involved isn’t chump change, either; the lawsuit cites a claim from RBXFlip’s owners that 7 billion Robux (worth over $70 million) was wagered on the site in 2021 and that the site’s revenues increased 10 times in 2022. The sites are also frequently promoted by Roblox-focused social media influencers to drum up business, according to the lawsuit. Roblox’s terms of service explicitly bar “experiences that include simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or in-experience items of value.” But the gambling sites get around this prohibition by hosting their games away from Roblox’s platform of user-created “experiences” while still using Robux transfers to take advantage of players’ virtual currency balances from the platform. In a statement, Roblox said that “these are third-party sites and have no legal affiliation to Roblox whatsoever. Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards.”