According to a class action lawsuit filed by parents, the popular gaming platform Roblox acts as an illegal gambling network that preys on children< writes Bloomberg.
Several parents have filed a complaint against Roblox Corp. in the U.S. District Court for the Northern District of California after their children lost money in the form of the platform’s in-game currency on third-party gambling sites. They claim that Roblox, which hosts a 3D metaverse in which users interact, violates the US Racketeer Influenced and Corrupt Organizations Act (RICO Act) and illegally profited from underage gambling.
“Children, who previously could not access the funds to participate in online gambling, now have, collectively, billions of Robux at their disposal,” the plaintiffs claim.
This new lawsuit comes at a time when Roblox is already facing harsh criticism for undermining efforts to make the Internet safer for minors. In May 2023, a compliance watchdog group found that the California-based company had violated responsible marketing standards for children by blurring the line between content and advertising. Roblox was also the subject of a complaint to the Federal Trade Commission filed last year by the watchdog group Truth in Advertising.
Central to the new lawsuit is Roblox’s use of and oversight of Robux, the platform’s digital currency, which has an actual monetary value – one Robux is worth $0.0125. According to the complaint, users under the age of 18 can use their parents’ credit cards to buy Robux on the platform, and Roblox is aware of every transfer in the virtual ecosystem.
The company’s terms of service claim to prohibit “experiences that involve simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or valuable items,” but according to the plaintiffs, these guidelines are “misleading” given that the company allowed third-party gambling websites to accept online bets using their own currency.
“These are third-party sites and have no legal affiliation to Roblox whatsoever,” Roblox said in a statement to Bloomberg Law. “Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards.”
However, at the same time, the complaint describes the process by which minors can use the Roblox platform to gamble. After purchasing Robux through the platform, they can go to the “virtual casinos” of one of the gambling websites outside the Roblox ecosystem and link their Robux wallet to the gambling website, meaning that Roblox can still track the electronic transfers.
Although Roblox could have stopped this “illegal gambling network,” the plaintiffs claim that the company is “enriching itself” using this scheme. They say that Roblox charges a 30% commission for converting Robux on websites back into dollars, earning “millions annually” from this.
The complaint also states that gambling sites encourage minors to advertise their illegal gambling platform, as if the Bloxflip website offered free Robux to users who advertised it on TikTok.