Big Fish Games Lays Off Staff as Judge Approves $155 Million Class Action Settlement for Former Players

Posted on: September 4, 2020, 07:02h. 

Last updated on: September 4, 2020, 09:52h.

Social casino developer Big Fish Games is expected to lay off 250 staff members as part of a restructuring process as it downsizes, according to a staff memo dated Tuesday, Sept. 1.

Big Fish Games
Big Fish Games’ Seattle HQ will be hit by staff cuts as the company pivots to a mobile-only operation. (Image: Business Journal/Andrew Bolante)

This is the second round of layoffs in as many years. The new cutbacks, which mainly affect its Seattle office, come just 24 hours after a federal judge issued preliminary approval of two class-action settlements.

These will see Big Fish owner Aristocrat Technologies, and former owner Churchill Downs Inc, cough up $155 million to compensate former customers who lost money via the Big Fish app.

The lawsuits stem from an initial case against Big Fish brought in 2015 by former player Cheryl Kater.

Shock Ruling

Kater argued that Big Fish Games constituted illegal gambling in Washington State and claimed she was entitled to recoup her losses under an antiquated law called the Recovery of Money Lost at Gambling Act.

The district court tossed the case. But in 2018 a federal appellate judge sensationally sided with Kater. Thus, Washington became one of a very few jurisdictions in the world that considers games played with virtual ‘play-money’ chips to be bona fide gambling games.

Washington defines gambling as “risking something of value on the outcome of a contest of chance or a future contingent event not under the person’s control or influence to receive something of value in the event of a certain outcome.”

Judge Milan D. Smith ruled the virtual play chips used in Big Fish’s Casino games constituted “something of value,” despite their lack of direct monetary worth – a ruling with huge ramifications for the social games industry.

Lawmakers Batting for Big Fish

Copresidents Andrew Pedersen and Jason Willig made no mention of the settlements in the staff memo. Rather, the layoffs were part of a strategy to pivot from a multi-platform provider to a mobile-focused operation.

“The scale that Big Fish developed over many years as a multi-platform publisher has made it difficult to successfully lead in mobile, which requires greater agility and different operating and creative capabilities,” they wrote. “By pivoting how we operate and sharpening focus, we will gain increased flexibility to engage players more effectively today and invest more for the future.”

Two bills introduced in the Washington legislature in February look to safeguard the state’s gaming industry. An estimated 20 percent of the global video game development industry is now based in Washington.

The bills, sponsored by State Rep. Zach Hudgins (D-11th) and State Sen. Mark Mullet (D-5th), would modify state gambling law to exempt games where players do not cash out for real money in order to protect the industry from more lawsuits.