Justia Gaming Law Opinion Summaries

Skillz provides a mobile platform that hosts games in which players compete for cash prizes. To participate in paid-entry competitions, a user must save the player account; after entering a date of birth, the user must tap a box with the word “Next.” Below the “Next” box is the advisory statement: “By tapping ‘Next,’ I agree to the Terms of Service and the Privacy Policy.” A hyperlink, if tapped, takes the user to Skillz’s terms of service. Gostev saved a Skillz player account in 2019. The Terms of Service then had 15 pages.Gostev sued Skillz, alleging that its games constituted illegal gambling, predatory and unlawful practices, and violated the Unfair Competition Law and the Consumers Legal Remedies Act, Gostev alleged the arbitration agreement was unenforceable. Skillz argued that Gostev’s challenges to the enforceability of the arbitration provision had to be submitted to an arbitrator.The court of appeal affirmed a finding that the arbitration agreement was procedurally and substantively unconscionable. The court noted provisions that a plaintiff’s damages are limited, the arbitration must occur in San Francisco, a plaintiff only has one year to bring his claim, the parties must split the arbitration fees and costs, and the defendant can obtain equitable relief without posting a bond or security. Unconscionability ”permeates the agreement such that severance is unavailable,” View "Gostev v. Skillz Platform, Inc." on Justia Law

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

Oklahoma and the Citizen Potawatomi Nation (the “Nation”) entered into a Tribal-State gaming compact; Part 12 of which contained a dispute-resolution procedure that called for arbitration of disagreements “arising under” the Compact’s provisions. The terms of the Compact indicated either party could, “[n]otwithstanding any provision of law,” “bring an action against the other in a federal district court for the de novo review of any arbitration award.” In Hall Street Associates, LLC. v. Mattel, Inc., 552 U.S. 576, (2008), the Supreme Court held that the Federal Arbitration Act (“FAA”) precluded parties to an arbitration agreement from contracting for de novo review of the legal determinations in an arbitration award. At issue before the Tenth Circuit Court of Appeals was how to treat the Compact’s de novo review provision given the Supreme Court’s decision in Hall Street Associates. The Nation argued the appropriate course was to excise from the Compact the de novo review provision, leaving intact the parties’ binding obligation to engage in arbitration, subject only to limited judicial review under 9 U.S.C. sections 9 and 10. Oklahoma argued the de novo review provision was integral to the parties’ agreement to arbitrate disputes arising under the Compact and, therefore, the Tenth Circuit should sever the entire arbitration provision from the Compact. The Tenth Circuit found the language of the Compact demonstrated that the de novo review provision was a material aspect of the parties’ agreement to arbitrate disputes arising thereunder. Because Hall Street Associates clearly indicated the Compact’s de novo review provision was legally invalid, and because the obligation to arbitrate was contingent on the availability of de novo review, the Tenth Circuit concluded the obligation to arbitrate set out in Compact Part 12 was unenforceable. Thus, the matter was remanded to the district court to enter an order vacating the arbitration award. View "Citizen Potawatomi Nation v. State of Oklahoma" on Justia Law

This dispute arose out of a video game publishing agreement entered into by Timegate and Gamecock. Under the terms of the agreement, Timegate was to be the developer and Gamecock was to be the publisher of a futuristic military-style video game entitled "Section 8." When their business relationship deteriorated, the parties proceeded with arbitration and the arbitrator awarded Gamecock monetary compensation and a perpetual license in the video game's intellectual property. The district court vacated the arbitrator's award, determining that the perpetual license was not consistent with the "essence" of the underlying contract. Because the agreement bestowed broad remedial powers upon the arbitrator and because it was fraudulently induced and irreversibly violated by Timegate, the perpetual license was a rational and permissible attempt to compensate Gamecock and maintain the agreement's essence. Accordingly, the court reversed and remanded, finding that the perpetual license was a remedy that furthered the essence of the publishing agreement. View "TimeGate Studios, Inc. v. Southpeak Interactive, L.L.C., et al" on Justia Law