By allowing third-party casinos, Roblox failed to protect minors, judge rules

SAN FRANCISCO (CN) — A federal judge again allowed negligence claims to proceed against Roblox in a class action brought by parents who claim the game essentially functions as an illegal gambling ring for children.

The parents first sued in August 2023. According to their complaint, their children lost money when they wagered Roblox’s in-game currency, Robux, on third-party gambling websites.

The parents claim Roblox knowingly allowed these third-party gambling websites to accept wagers using Robux — and that Roblox made millions of dollars in the process. The game charges a 30% fee on the gambling websites’ conversion of Robux back into dollars.

U.S. District Judge Vince Chhabria, a Barack Obama appointee, said in seven-page order Thursday that Roblox acted with misfeasance, noting it had a duty to protect its users.

“The plaintiffs allege that Roblox has created a clearinghouse for illegal transactions within the virtual playground, and that Roblox facilitates those transactions and profits from them," Chhabria wrote. “They allege that these deliberate design decisions by Roblox created the risk of harm to the minor plaintiffs who otherwise would not have been exposed to the virtual casinos.”

Harm to users was foreseeable, Chhabria said, because Roblox incentivizes developers to create experiences that users pay Robux to play.

Developers can profit by then exchanging those Robux for real money using the game’s Developer Exchange Program. Roblox makes money by selling the Robux to users and taking a commission fee for all user-to-user transactions.

“Given that structure, it seems entirely foreseeable that developers would want to create highly addictive experiences, such as gambling games, that entice users to spend a lot of Robux," Chhabria wrote. “What’s more, according to the complaint, the virtual casinos were well known to both users and Roblox itself.”

“The three virtual casinos launched widespread marketing campaigns, prominent Roblox social media influencers discussed or endorsed the virtual casinos, and Bloxflip had over 5.7 million monthly visitors in 2022,” the federal judge continued. He said it was reasonable to infer that “Roblox knew how these virtual casinos operated and could foresee the probability that minors would navigate to these sites and gamble their Robux away.”

Chhabria, though, hasn’t allowed all claims brought in the class action to proceed.

Fraud claims against Roblox were tossed, because the plaintiffs failed to allege that the class of parents saw any communication from Roblox. This finding warranted dismissal with prejudice of all state-law omission claims, Chhabria ruled.

At a hearing in June, plaintiffs argued that Roblox should have disclosed the risk of being drawn into online gambling to children rather than parents. Kids would then have acted differently, they argued.

Chhabria did not exactly buy this reasoning. “Counsel’s seat-of-the-pants comments were both implausible and contradicted by the theory underlying the current iteration of the complaint, which is that the minor plaintiffs were legally and practically incapable of making a decision about whether to gamble,” he wrote. “The plaintiffs have been given plenty of opportunity to state claims for fraud, yet they made virtually no effort to beef up their allegations since the prior iteration of the complaint was dismissed."

Finally, Chhabria ruled that requests for injunctive relief should be dismissed for lack of standing. Minor users are not using Roblox anymore and are not likely to use it again in the future, he said, so there is no injury that can support any injunctive relief.

Lawyers for the plaintiffs and for Roblox did not respond to requests for comment by press time.