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Nevada resident Steven Horn is suing Amazon for hosting and promoting free-to-play social casinos on its app store.

Amazon involvement

Citing a 2018 US appeals court decision which found social casino apps to be illegal under Washington state gambling law, the lawsuit alleges that Amazon has earned billions of dollars through an “illegal internet gambling enterprise.”

The plaintiff said he was addicted to online slot games and accused Amazon of offeirng more than 30 illegal casino apps to consumers, in a “dangerous partnership” with social casino operators.

“Despite knowing that social casinos are illegal, Amazon continues to maintain a 30% financial interest in the upside by brokering the slot machine games, driving customers to them, and acting as the bank,” the lawsuit said.

It added that Amazon plays a key role in the promotion of social casinos by providing the means for distribution of the games and the processing of payments from users.

Amazon also provides operators with “the technological means to update their apps with targeted new content designed to keep addicted players spending money,” the lawsuit alleges.

The plaintiff argues the result of Amazon’s partnership with social casinos is that players become addicted to casino apps and take out credit to continue funding their habit.

In 2020 alone, customers spent an estimated $6bn on social casino virtual chips, it added.

Unchecked tactics

A further point set out in the lawsuit explains that social casino operations, being unregulated, do not need to follow the same rules as traditional land-based or online casinos.

One social casino CEO is quoted as saying: “Our games aren’t built to be bulletproof like you’d need to be if you’re a real gambling company. We can do things to make our games more [fun] that if you were an operator in Vegas you’d go to jail for, because we change the odds just for fun.” 

The lawsuit suggested that this means that not only are social casinos illegal, their games would also not be legal under any state law “as they cheat players out of a legitimately randomised slot machine experience”.

“Not only can players never actually win money, but their financial losses are maximised by deceptive gameplay tweaks that would never be allowed in a physical slot machine,” it added.

The lawsuit alleged that these measures are used to increase the likelihood of addiction among users and therefore maximise the revenues of social casino operators.

The lawsuit can be viewed in its entirety here.

Established precedent

The plaintiff in this lawsuit is represented by Chicago law firm Edelson, which has previously secured hundreds of millions of dollars in class-action settlements in related litigation over social casinos.

The case is believed to be the firm’s eighth related to social casino apps.

In a previous case led by Edelson in June this year, a US judge approved a $415m class-action settlement to resolve claims that DoubleDown Interactive and IGT had violated Washington state gambling laws and consumer protection provisions related to social casino operations.

IGT and DoubleDown denied any liability and argued that the claims rested “on novel and untested interpretations of Washington’s gambling laws.”

After four years of litigation, however, US District Judge Robert Lasnik in Seattle federal court called the resolution “fair, reasonable, and adequate.” 

Elsewhere, in July, Apple, Google and Meta warned a US Court of Appeals that if online platforms could be held liable for processing purchases of virtual chips sold by social casinos, “the entire internet economy could be at risk”.

The firms were appealing a 2022 ruling that they were liable for essentially acting as gambling operators by facilitating and earning commission on the sale of virtual chips in social casinos.

They argued that they were not liable for the sale of the virtual chips, which were created and sold by third parties.

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