Roblox, a widely-used online gaming platform mainly for children, is facing allegations of enabling child gambling in a new class action lawsuit filed by concerned parents.
According to Bloomberg Law, the lawsuit was brought forth by Rachel Colvin and Danielle Sass in the US District Court for the Northern District of California after their children reportedly incurred financial losses through the platform's internal currency on third-party gambling websites.
The parents asserted that Roblox Corp. had violated the Racketeer Influenced and Corrupt Organizations Act by profiting from minors' gambling activities.
BURLINGAME, CALIFORNIA - AUGUST 10: David Baszucki, founder and CEO of Roblox, presents at the Roblox Developer Conference on August 10, 2019 in Burlingame, California.
'Robux' of Roblox
The lawsuit claimed that Roblox's use of "Robux," its digital currency with actual monetary value, is central to the issue. Each Robux is equivalent to $0.0125, and users under the age of 18 can purchase Robux using their parents' credit cards.
The lawsuit claimed that Roblox is aware of each transaction within its virtual ecosystem. While Roblox's terms of service prohibit simulated gambling experiences, the complaint contends that the company's allowance of third-party gambling websites to accept bets with the currency contradicts these guidelines.
Roblox has faced scrutiny before for allegedly endangering minors' safety online. A compliance group found in May that the company violated guidelines for responsible marketing to children by blurring the lines between content and ads.
The consumer advocacy group Truth in Advertising also filed a complaint about Roblox at the Federal Trade Commission last year. The lawsuit named Satozuki Limited B.V., Studs Entertainment Ltd., and RBLXWild Entertainment LLC as additional defendants.
These entities are accused of facilitating third-party gambling websites accessible to Roblox users, the majority of whom are reportedly under 18.
The lawsuit described how children can use the Roblox platform to gamble, including how to buy Robux and link their Robux wallet to outside gambling websites.
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Alleged Illegal Gambling Ring
While the plaintiffs argued that Roblox could stop this alleged "illegal gambling ring," they asserted that the company benefits financially from the scheme.
It is reported that Roblox charges a 30% fee on the conversion of Robux back into dollars on the websites, resulting in substantial revenue.
The lawsuit also alleged that the gambling websites incentivize minors to promote the platforms, with one website offering free Robux to users who promote it on TikTok. Colvin and Sass, unaware of their children's gambling activities at the time, are demanding a trial by jury.
Represented by Weitz & Luxenberg, PC and Johnson Firm, they bring the proposed class action against Roblox. The company has yet to respond to the allegations.
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