A lawsuit filed in a California court alleges that Roblox, a massive 3D online game which provides a variety of customizable experiences to players, is facilitating illegal gambling aimed explicitly at children and functioning with the company’s knowledge. Roblox is profiting from the operation to the tune of millions of dollars, according to the complaint.
According to the lawsuit, Roblox’s in-game digital currency “Robux,” which is purchased with real-world currency, is being wagered and often lost by underage gamblers at a group of online casinos. Those casinos, which the lawsuit names as RBXFlip, Bloxflip, and RBLXWild, operate off site but use Robux as what are essentially gambling chips for bets.
According to the complaint, Roblox “registers each and every exchange of Robux for gambling credits and allows illicit gambling, by minors, using the Roblox website.”
The way it works, the lawsuit explains, is simple. Users buy Robux on the Roblox website, then go to one of the online casino’s websites, the complaint says. “Then,” the lawsuit claims, “the user links their Robux wallet on Roblox’s website to the gambling website.”
“Throughout this process,” the complaint alleges, “Roblox keeps track of all of these electronic transfers and has knowledge of each transfer that occurs in its ecosystem.”
Roblox profits handsomely off the arrangement, the complaint alleges, because of the 30% commission they take on all user to user transactions.
“As a result of the illegal gambling enterprise, Roblox has made substantial revenue via its transaction fees … to the tune of tens of millions of dollars, seeking to turn its minor customers’ gambling struggles into revenue,” the complaint says.
During the pandemic, over half of all kids in the U.S. under 16 played Roblox, the Verge reported in 2020.
Roblox’s business model is sustained by the sale of Robux, which accounts for “substantially all of our revenue” according to a March 2022 Quarterly report.
Roblox began allowing Robux to be cashed out into real world currencies in 2013, the complaint explains.
“The advent of the Developer Exchange Program has attracted an enormous amount of users to the platform in search of riches,” the complaint reads, with $500 million in payouts to developers in 2021 alone.
One of the casinos named in the complaint, RBXFlip, claims in its terms of service that no one under 18 is allowed to use their website. However, according to the complaint, RBXFlip has no age verification features that actually prevent anybody with a Roblox account to use the site. Children 13 and older can sign up for Roblox.
Another site mentioned in the complaint, Bloxflip, had nearly 5.7 million monthly visitors in 2022. While they also have an 18-year-old age limit, all that’s needed to log in to the site is a Roblox username, the complaint says.
Like the other two sites, RBLXWild also lacks any age verification measures, the complaint says. The complaint also alleges that the casinos paid influencers on TikTok and YouTube to promote gambling to their young audiences.
Roblox’s Community Standards say that “experiences that include simulated gambling, including playing with virtual chips, simulated betting, or exchanging real money, Robux, or in-experience items of value are not allowed.”
But because Roblox monitors all transactions in their currency, the complaint alleges, the company had to have been aware of the online casinos using Robux for gambling.
“These are third-party sites and have no legal affiliation to Roblox,” Roblox’s Director of Corporate Communications Cris Paden told the Daily Dot. “Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards … without question, we definitely view these websites are in violation of our Terms of Service and Community Standards, and we are indeed pursuing these types of websites in terms of enforcement.”
