Aristocrat & CDI Settle Two Big Fish Games Lawsuits For $155M

Aristocrat Leisure and Churchill Downs Incorporated (CDI) announced that they have set aside $155 million to settle two lawsuits filed against CDI’s divested Big Fish Games (BFG), a social game developer based in Seattle.

CDI concluded the sale of BFG, worth $990 million, to Aristocrat in January 2018. Both parties have since revealed details about their agreement in principle to settle in the Thimmegowda v Big Fish Games, Inc. and Kater v Churchill Downs, Inc. lawsuits.

The agreement will ultimately depend on the approval of the US Federal District Court for Washington’s Western District. Once the final court approval is issued, Aristocrat and CDI will create a settlement fund of $155 million. CDI will shoulder $124 million, while Aristocrat will shoulder $31 million.

Aristocrat also agreed to release CDI from any indemnification responsibilities under their stock purchase deal in November 29, 2017. All members of the settlement class who do not explicitly remove themselves from consideration will have to forego any future claims on the subject matter of the lawsuits.

The parties in both lawsuits are now set to give notice to the District Court about their settlement in principle. The Court will then likely stay the cases until the filing of a formal settlement deal.

Win For Kater and Thimmegowda Lawsuits 

BFG’s online games have been deemed by the US Court of Appeal for the Ninth Circuit as illegal online gambling.

Plaintiff Cheryl Kater lost more than $1,000 worth of virtual chips in Big Fish Casino and filed suit against the company. The Court of Appeal overruled the district court’s earlier dismissal of a class action suit against CDI, and stated that CDI’s Big Fish Casino offering constituted a violation of Washington’s law against illegal online gambling. 

According to the Court of Appeal, all online gambling is illegal within the state of Washington. While the Court did understand that the virtual currency used to play in Big Fish Casino had no real monetary value, they contended that the game had a way for players to transfer chips to one another, which could be construed as a round-about way for cashing out winnings. 

A year after the Kater lawsuit, plaintiff Manasa Thimmegowda lost more than $3,000 from playing BFG products, mostly by using real money to play with virtual in-game currency. Thimmegowda filed the lawsuit with the US District Court for the Western District of Washington, naming BFG, Aristocrat, and CDI in her filing.