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Ristic v. Machine Zone, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 19, 2016

MIHAJLO RISTIC, individually, and on behalf of all others similarly situated, Plaintiff,
v.
MACHINE ZONE, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge

         Plaintiff Mihajlo Ristic (“Ristic”) brings this class action complaint against Defendant Machine Zone, Inc. (“Machine Zone”) for alleged violations of the Illinois Loss Recovery Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Ristic seeks to recover gambling losses and damages that he allegedly incurred by playing the “Casino” in Machine Zone's “Game of War” videogame app. Currently before the Court is Machine Zone's motion to dismiss Ristic's First Amended Complaint for failure to state a claim [29]. For the reasons explained below, the Court grants Machine Zone's motion [29] and dismisses the First Amended Complaint with prejudice and will enter a final judgment under Rule 58. The Court also denies as moot Ristic's motion to certify a class [4] and Machine Zone's motion to dismiss Ristic's original complaint [20].

         I. Background [1]

         Machine Zone produces a popular videogame titled “Game of War.” This videogame is played on mobile devices and is available on both the Apple and Android platforms. [24] at ¶ 1. Players can download the game at no initial charge. Players have the option of spending real money in order to advance through the game at a faster pace and obtain more in-depth access. [24] at ¶ 2. This revenue model is commonly known as “free-to-play” or “freemium.” [24] at ¶ 9. Due to the game's popularity, Machine Zone has generated more than $600 million in revenue since early 2014. [24] at ¶ 20.

         The instant lawsuit focuses on the portion of the game known as the “Casino.” In this part of the game, players are initially given a free spin on a virtual wheel. [24] at ¶ 24. The wheel uses an animated light that circles around the slots to indicate a spin. [24] at ¶ 29. Each “slot” on the wheel includes an in-game resource (“Prize”) that the player receives if the animated light lands on a specific slot.

         In order to spin the wheel, players click the “play” button. From that moment on, the player has no input on the outcome of the spin. [24] at ¶ 34. There is no skill necessary to acquire more desirable Prizes. Id. The outcome of the spin depends entirely on the algorithm that Machine Zone has programmed into the game. [24] at ¶ 35.

         Not all Prizes are of the same importance to the player's gameplay advancement. Ristic alleges that some Prizes are worth more than the initial wager of $.60, while some Prizes are worth less. [24] at ¶ 30; see also id. at ¶ 26. The awards that are allegedly more valuable than the minimum wager range from $1.18 for 10, 000 “chips” to $36.59 for 8, 800 units of virtual “gold.” [24] at ¶ 34. This valuation is derived from examining what the Prizes would cost in virtual “gold” (which can be purchased with real money) if the player were to purchase those items in the virtual marketplace versus obtaining them through the Casino.

         Following the initial free spin, each spin costs a minimum of 5, 000 “chips, ” which would cost $.60 to purchase. [24] at ¶¶ 25, 32. “Chips” can be acquired through different methods, including through an exchange for virtual “gold.” Players can obtain virtual “gold” by purchasing the virtual “gold” with real money. [24] at ¶ 20. Prices for virtual “gold” start at $4.99 for 1, 200 units and max out at $99.99 for 20, 000 units. [24] at ¶ 26. The purchase of virtual “gold”, or any in-game purchase, is completely optional and voluntary. [24] at ¶ 20. In addition to the normal playing mode, players can spin the wheel in a “High Roller Mode.” [24] at ¶ 28. This mode provides players with the potential to win more enticing Prizes. However, to have access to this mode, players have to increase their wager. Id.

         In early 2014, Ristic downloaded Game of War onto his smartphone. [24] at ¶ 46. After his initial free spin in the Casino, Ristic began purchasing Chips to use for additional spins. In total, between April 9, 2015 and October 9, 2015, Ristic spent more than $50 in Game of War Casino wagers. [24] at ¶ 48. Ristic is unable to determine the exact amount he spent, but claims it is likely more than $500. Id.

         In Count I of his governing First Amended Complaint [24], Ristic alleges that Machine Zone violated the Illinois Loss Recovery Act (“ILRA”) by operating a gambling device that caused Ristic and the other members of his proposed class to lose at least $50. See [24], ¶ 67. In Count II, Ristic alleges that Machine Zone violated the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”) by engaging in unfair conduct-namely, violating Illinois' gambling laws. Currently before the Court is Machine Zone's motion to dismiss the First Amended Complaint for failure to state a claim. See [29].

         II. Legal Standard

         To survive a Rule 12(b)(6) motion to dismiss, a complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). However, “[s]pecific facts are not necessary; the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Twombly, 550 U.S. at 555) (ellipsis in original). Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558. The Court reads and assesses the plausibility of a party's complaint as a whole. See Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011).

         III. Analysis

         A. The Illinois ...


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