Roblox Is Making Money Off Child Gambling, New Lawsuit Claims

Roblox: it’s one of the biggest and most popular gaming universes online, with millions of daily users and a highly dedicated teen and tween fanbase that ballooned during pandemic-era lockdowns. But according to a recent class-action lawsuit filed against the gaming company, attorneys for at least two minors claim that the company has maintained and targeted child users with an illegal gambling ecosystem — allegedly defrauding them of thousands of dollars. 

Plaintiffs Rachel Colvin and Danielle Sass said their sons both played Roblox but lost thousands of dollars on virtual gaming websites that accepted Roblox’s onsite currency Robux. Attorneys for Colvin and Sass did not respond to Rolling Stone’s request for comment, but both mothers said in the complaint they were unaware their minor children were gambling on the site. The lawsuit alleges that because Roblox allows these sites to operate with their proprietary currency, the site has violated the Racketeer Influenced and Corrupt Organizations Act. The two women, and any others who join the class action suit, are requesting damages and a trial by jury. 

For those who are not active Roblox players, it can be difficult to explain how the gaming site works, much less how it appeals to its over 200 million monthly users. The best way to describe it is as an online world, or metaverse, where players can congregate, build an avatar and then choose their own adventure. There is no one main game, instead, users can pick from a seemingly infinite number of minigames from virtual pet simulators to obstacle course puzzles— which has appealed to a vast amount of young kids. (In 2020, Roblox CEO David Baszucki claimed that 75 percent of U.S. children between 9 and 12 years old use Roblox monthly.) You can chat with other gamers, purchase avatars or game upgrades, and even develop your own games. While users can technically play for free, the best advantages are unlocked by using Robux — which can be obtained by directly attaching a credit card to a gamer’s account, or by purchasing gift cards. 

Because the gaming site has a particularly young user base, Roblox’s Community Standards expressly forbid games with simulated betting or gambling using money, Robux, or any other items of value. But according to the suit, at least three virtual casinos — RBXFlip, Bloxflip, RBLXWild — let users sign up and gamble with Robux, even using Roblox imagery in their names. Because Roblox currency is proprietary to the site and does not leave accounts unless it is converted back to cash (each Robux is worth close to $.00095, according to Coinbase), the lawsuit alleges that Roblox has been made aware of the currency exchange by several popular users and still allows minors to participate under their “virtual roofs,” making money off of the transaction fees.

The three online casinos named in the suit could not be reached. In a statement to Rolling Stone, a Roblox representative declined to comment on the specifics of the ongoing litigation, but noted that the named gambling sites were not affiliated with Roblox.

“Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards. Roblox has teams and processes in place to investigate these websites to protect our brand and platform, including, where possible, having the websites removed. In some cases, we engage with law enforcement as part of our efforts,” Roblox tells Rolling Stone. “Ensuring a safe and compliant online experience for users of Roblox is a core tenant of the company. Roblox will continue to be vigilant in combating entities who engage in practices that are in violation of our policies or endanger the safety of our community.”

This isn’t the first time the gaming site has been in hot water over the things appearing on its kid-friendly platform. In 2021, the site beefed up its rating and parental control program after a slew of NSFW content and strip club-esque games got popular, and spokespeople told Rolling Stone in a comment that Roblox was working with third-party chat apps to curb the presence of sexual content on the website. But even with additional precautions, the lawsuit claims that since Roblox has allowed the third-party sites to thrive, it’s making money directly on the backs of its youngest users. 

“Because the exchange of Robux for gambling credits occurs on the Roblox platform, using Roblox’s technology and digital currency, Roblox has knowledge of these exchanges and facilitates them,” the suit reads. “When the Gambling Website Defendants cash out their ill-gotten gains, Roblox also earns money on the cash-out fees. In short, all Defendants work together to enrich themselves and each other at the expense of their adolescent and teenage users.”

From Rolling Stone US.