Does Roblox Encourage Kids to Gamble?

The online gaming platform Roblox is being accused of preying on children and acting as a de-facto illegal gambling operation, according to purported class action lawsuit filed by parents.

The recently filed federal lawsuit against Roblox Corp. was filed in California by Rachel Colvin and Danielle Sass, who claimed that their children had lost money in the form of the platform's internal currency on third-party gambling sites. The suite accuses Roblox of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) by profiting illegally from minors' gambling activities.

At the heart of the legal action lies Roblox's handling and management of "Robux", their virtual currency which holds real-world value, with each unit of Robux equating to $0.0125. The complaint alleges that users under the age of 18 can employ their parents' credit cards to procure Robux on the platform, and that Roblox is privy to every transaction that takes place within the digital environment.

Their lawsuit comes as Roblox faces sharp criticism for undermining efforts to make the Internet safer for minors. In May, a compliance group found the California-based company violated standards for responsible marketing to children by not highlighting the difference between content and paid advertisements. Roblox was also the subject of a Federal Trade Commision complaint filed last year by watchdog group Truth in Advertising.

Also at issues are the numerous third party websites that encourage users to gamble using Robux and reward social media influencers who promote their sites.

While Roblox could conceivably halt this “illegal gambling ring,” Colvin and Sass in their federal complaint argue that the company is “significantly enriched” by the scheme. They allege that Roblox charges a 30% fee on the websites’ conversion of Robux back into dollars, raking in “millions in annual cash fees.”

If your children play Roblox, it's the right time to look over their shoulder, see what they're doing and perhaps implement some rules and guidelines for using the site.