Did You Know Kids Playing Roblox Are Using Their Robux to Play in Online Casinos?
An interview with esports and gambling journalist Cody Luongo, hot off Roblox getting sued in California court.
Roblox is currently being sued for running “an illegal gambling ring that preys on children,” per a Bloomberg story. The class action, filed in the Northern District of California last Tuesday, claims Roblox’s terms of service are misleading. While Roblox bans “simulated gambling” where players can exchange “real money, Robux, or in-game items of value,” in reality, the suit argues, there are a number of third-party websites built to facilitate such transactions, and they’re being used by minors.
You can read the suit in its entirety here. It’s written in plain language, and says Roblox should be held accountable because such actions violate the Racketeer Influenced and Corrupt Organizations Act. (RICO! It’s a term that’s been in the news.)
One of the websites mentioned in the suit is Bloxflip, a website where Roblox users can use their existing Roblox login credentials to use their existing robux, the platform’s in-game currency, to gamble. There’s a game where your bet makes more money the longer a virtual rocket stays in the air, and the goal is to cash out before the rocket crashes and you lose everything. Another game is like Minesweeper, with players earning additional robux the longer they’re able to avoid clicking a mine.
Bloxflip and website like it are casinos, plain and simple. They even describe themselves as such! They aren’t trying to hide what they’re up to! On the Bloxflip website, they call themselves “the biggest and most trusted Roblox social casino.”
“These are third-party sites and have no legal affiliation to Roblox whatsoever,” said a Roblox spokesperson to Bloomberg. “Bad actors make illegal use of Roblox’s intellectual property and branding to operate such sites in violation of our standards.”
That might be true, the Bloxflip and places like it are in operation, as of this writing.
Coincidentally, a few weeks ago journalist Cody Luongo, who runs the excellent Sharpr blog here on Substack focusing on covering esports and gambling, published this alarming headline: “Kids are gambling millions of dollars on Roblox casinos.”
What Luongo found, and what Roblox hasn’t squashed, was upsetting. It appears underage Roblox users (and influencers) were being courted by these online casinos.
DarkkHayden, a 14-year-old Roblox creator with over 600K combined followers on YouTube and TikTok, is one of many examples. In January, they claimed to have received an email from Bloxflip’s marketing team offering to sponsor their content, agreeing to pay a fixed rate for views and an affiliate code that would provide a percentage of wagers from referred accounts in perpetuity.
Another example is uwucutesingle, a Roblox creator with over 6.4M subscribers on YouTube and known Bloxflip partner, who revealed that they were 16-years-old in a post last year. A sponsored video from January 11 has over 7M views.
“Like 90 percent of the people promoting are underage, and it's not even difficult to figure that out just based on the type of content they put out,” the owner of the Roblox trading site said. “These gambling sites don't do any due diligence in asking for the age of the people they're promoting with.”
This is not new to video games; Valve dealt with the very same issue related to Counter-Strike for a number of years, though it managed to eventually dismiss similar lawsuits. The company did send cease-and-desist letters to a number of websites that were contributing to the casino atmosphere, and some of them did actually shut down.
I spoke with Luongo about their Roblox findings at the time, but never published the conversation because I’d just never found the right space for it. Given this lawsuit, it felt like a good time to dig up those emails and share what we’d talked about. I even managed to squeeze in an updated question about the lawsuit and its ramifications.
What do you make of Roblox being sued over these virtual casinos?
Cody Luongo: The lawsuit filed against Roblox Corporation is a major development in this story and one that will undoubtedly force the company to act on this issue. Given Roblox has generated potentially millions of dollars in transaction fees directly linked to underage gambling and were arguably aware of it, the outcome of this case could be explosive in terms of the company's liability. I expect this case has the potential to go quite some distance all things considered versus how matters played out when Valve was in a similar situation with Counter-Strike several years ago.
How did you first hear about this story, and what made you go "hmm, this sounds messed up, I need to investigate"?
Cody: I had received a tip about a parent whose child had supposedly gambled upwards of five-figures on Roblox. Despite reporting on the esports and gaming industry for a handful of years, I had never written about Roblox. I wasn’t privy to the game or its community, but given my editorial scope, this was something I decided to look into immediately.
Navigating to these sites took little effort, but I understand that most people also wouldn’t naturally find themselves searching “Roblox gambling” on Google, which was enough to bring me into that world and see what was happening at a surface level. Retrospectively, I think this is a big part of the story and reason why this has gone unreported in the media for so long. It also goes to show that, despite the size of these third-party sites, they are somewhat discreet. Unless you’re a Roblox consumer yourself, and particularly one of a younger age, you probably wouldn’t be served this content on YouTube and TikTok where most of it appears to be digested. Even if you are, it’s also not always abundantly clear that these videos are promoting illegal gambling as these casino sites wrap Roblox’s child-friendly look and feel around their sites and promotional material. So clearly this piece has played to their advantage in more ways than one, including going undetected by government and regulators.
Kids should probably not be gambling. I think we're all in agreement there. But I also get the attraction of gambling, and I get the attraction of making a bunch of money as a young kid. Why do you think kids fall into these traps?
Cody: I think the idea of ‘winning big’ is really tantalizing, particularly when you connect it to a video game that is already deeply meaningful to someone. And that piece is enormously enhanced in all the wrong ways when you're talking about someone 16-and-under.
There are reasons why you need to be a certain age to gamble legally. Gambling can be incredibly addictive—the wins are intoxicating and the losses are crushing. For responsible players (who are of legal age), gambling comes out of their entertainment wallet, and they are very comfortable putting $20 on a game knowing that they can just as easily lose it. Children don’t have that same level of emotional maturity and responsibility, and many of them would be devastated to lose all of their Robux, as I’m sure many have while playing on sites like these.
In some ways, these casino sites sell this promise to players that they have a chance to get that item they could have only dreamed of, and in Roblox, where some rare items can fetch as much as five- or six-figures (USD), that can be an unfortunately powerful message that impulsive kids will latch onto.
Roblox has an older audience, but it's broadly seen as being aimed at children. At your publication, Sharpr, you cover esports and betting. How often does that work cross over with children? Is this a broader problem?
Cody: Esports betting is an emerging segment of the global sports wagering industry, and doesn’t necessarily have anything to do with what is happening here in Roblox. Esports betting isn’t inherently problematic assuming it’s delivered in a regulated environment with the proper consumer protections in place, which is part of the reason this ordeal with Roblox casinos is so concerning, as they are completely unregulated.
With that being said, there are other conversations happening within the context of gaming and gambling that are worth noting, such as loot boxes. These are in-game microtransactions with randomized mechanics and rewards. This has become a more popular monetization model as the games industry has shifted over the last handful of years from one-time unit sales to a games-as-a-service model where video games are updated over time and users pay for in-game content and expansions. When it comes to randomized rewards however vs. paying for a specific piece of content, some regulators in Belgium, Netherlands, and Austria for example have taken a hard stance against them. Some countries have outright banned loot boxes while other nations are taking an increasingly closer look at this segment and whether or not it should be deemed gambling or not.
We also see some sportsbook operators looking at channels like Twitch to engage younger consumers. This can be a little bit more morally ambiguous depending on who you ask, but as with anything in this sector, it has to be delivered responsibly and with respect to local regulation, which is in place to protect consumers. This is one of the main advantages of shifting sports betting outside of the black market and into a regulated environment where we have checks and balances. Some folks are engaging in this responsibly, but there are still chances that a popular livestreamer on Twitch or YouTube may unintentionally expose gambling to a minor.
“I think the idea of ‘winning big’ is really tantalizing, particularly when you connect it to a video game that is already deeply meaningful to someone. And that piece is enormously enhanced in all the wrong ways when you're talking about someone 16-and-under. There are reasons why you need to be a certain age to gamble legally.”
Roblox's response was, basically, "hey, we're working on it." Do you feel their work is enough, though?
Cody: The size and growth of these sites are staggering. In my opinion, this situation requires immediate intervention from Roblox, but I’m afraid that this story alone may not be enough. It took a major class-action lawsuit against Valve to get skin gambling cleaned up in Counter-Strike. So until these sites are legitimately taken offline and Roblox consumers are no longer able to access them, I don’t think it’s enough.
Unfortunately, it may be a case of cat-and-mouse where taking down one of these casino sites means having another one or two crop up in its place. But that would still be a lot more meaningful than allowing them to operate unencumbered as they have been for so long. These companies are impressively sophisticated in how they operate. Bloxflip was very notable in this sense, and why I focused on them in my reporting. It isn’t just random kids running this operation; they come from online gambling backgrounds and are executing a very advanced (and clearly effective) marketing strategy. Having more than 20 billion views on TikTok and more than a million users is certainly nothing to sneeze at, and by those measures, I think the clock is ticking against Roblox Corporation to do something about this before it spirals further.
Is there a space for other forms of accountability—government regulation, law enforcement—to step in? Do you see any of that happening here? [Note: This question was asked weeks ahead of the lawsuit being filed.]
Cody: I think it will reach a point where government or law enforcement eventually steps in to shut these sites down if it continues to go on for much longer. But again, these casino sites, as big as they are, are discreet in the sense that most mainstream authorities will never hear about them unless a big lawsuit comes into play like we saw with Valve that pulls everything into focus. These sites are also visually made to look like users are gambling with video game currency and items versus real-money, which, for the uninitiated, is something that can be very easily dismissed or overlooked, despite these items and Robux having real monetary value to them.
All of these platforms are inconspicuous in that sense, and the promotional content online is equally blurred by several layers of obscurity that would naturally keep them out of the spotlight. With that being said, these websites are operating illegally in many different capacities and it will be a very bad day for those running them once regulators catch up. In my opinion, based on how fast these sites are growing and the amount of money they are handling, it's only a matter of time before we reach that point.
I don't know if you're a parent yourself, but regardless, do you have any advice for parents? Lots of them have kids playing Roblox. What signs can they look for that they might go down a rabbit hole like this?
Cody: I'm not a parent myself, but even if I was, I still think I'd find this question difficult to answer. The individuals behind these illicit casino sites are preying on young teens and making considerable amounts of money off them – it's a reprehensible act.
If I had any advice, it would be to monitor your kid's activity online, block the websites that were mentioned in my story, and be on the lookout for anything that could resemble online gambling on their desktops and have those conversations to address them early. There are many online casino sites like this that will accept users of any age from the U.S. or other jurisdictions where it requires a license to operate assuming the player will click a checkbox stating they are 18-or-over. Kids these days are very tech-savvy, and it may be possible for them to access an offshore gambling website through a VPN.
Have a story idea? Want to share a tip? Got a funny parenting story? Drop Patrick an email.
Also:
This is the kind of stuff that keeps parents up at night, where child-friendly platforms are grossly exploited because the platform’s defenses are wildly insufficient, and government regulation is years behind where it should be.
Lawsuits shouldn’t be the best course of prompting action, but I won’t be shocked if the reason something like Bloxflip disappears is because of this.
That kids are engaging with this behavior also isn’t a surprise; gambling streams have become incredibly popular over the years. Why not in Roblox, then, too?