Nevada resident Steven Horn is suing Amazon for hosting and promoting free-to-play social casinos on its app store.
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.
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.
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.
Tristram Bates, head of mobile engineering at mkodo, assesses Apple’s latest products for use in iGaming, from the trending Apple Vision Pro to the potentially game-changing iPhone ID.
The Apple Worldwide Developers Conference (WWDC) takes place in June every year, showcasing new software and technologies for Apple’s different products.
It’s an event that plays a big role for most industries, as it can lay the foundation for future innovation, based on the new functionalities introduced by the tech giant.
Over the last five years, Apple has thrown several curve balls at the betting and gaming sectors, including updating its guidelines to ban side-loaded HTML5 games content in real money gaming apps, forcing operators to create native apps.
As developers of digital products, we at mkodo follow the announcements that come out of the WWDC closely to be able to further evolve our product offering and push the boundaries when it comes to delivering gambling apps.
While the last few years have focused on accessibility and privacy, the 2023 conference introduced the idea of a utopian world previously only seen in the British television series Black Mirror.
Apple Vision Pro
The star of the show was without doubt Apple Vision Pro, a revolutionary ‘spatial computer’ that seamlessly blends digital content with the physical world.
Although we might be a while away from the headset going mainstream (mainly because of the very high cost of $3,499), it’s difficult not to get excited by the possibilities and imagine how it could be used by the gambling industry in the future.
A major step up from existing VR systems, Apple Vision Pro introduces a fully three-dimensional user interface controlled by eyes, hands and voice and it can track where a user’s eyes are focusing.
The headset detects when your pupils dilate – i.e. when a user is engaging with a part of the display – and this opens up a world of possibilities for in-game feature design.
Imagine a horror-themed game that can gauge if you’re startled by something, or even if you’re engaging with the game at all, providing vital feedback for R&D – there are so many possibilities that this new tech is opening the door to.
Unlike traditional VR headsets, the Apple Vision Pro is something that is five years ahead of anything else that is on the market both in clarity and its overall operational performance and how users interface with it. Respected industry experts have referred to it as ‘magical’.
Vision Pro lets users interact with digital content in a way that feels like it is physically present in their space. Users can create a digital persona and grow their world beyond the dimensions of a physical room and can immerse themselves into the environments.
With two ultra-high-resolution displays, Apple Vision Pro can transform any space into a screen that feels 100 feet wide with an advanced spatial audio system. With 100 arcade games to be made available at launch, it serves as an indication that real-money gambling would be a natural form of entertainment to be introduced at some point in the future.
Players would be able to immerse themselves into a casino environment or a racecourse by removing the need for a physical screen, or even digitally attending a sports event in another country, making the betting experience truly next-level and engaging.
Casino operators would be able to attract new audiences to their virtual venues that wouldn’t normally travel or aren’t able to attend their land-based alternatives. Such environments would allow for the creation of exclusive experiences with roulette or poker tables for users to play against each other and be able to read actual body language and gestures.
The futuristic nature of such ventures would require a lot of investment for anyone who wants to be a first mover in this space, but the fact remains that we could be facing something incredibly exciting here which would count as a true innovation in an industry where that word is used often but with little proof of evolution.
Much has, of course, been made of Apple pitching it at an aggressive price point. Generally, this is done to create initial demand, then it’s likely that Apple will release a more affordable version once that hype is built up. Time will tell.
The other development that should interest the gambling industry is iPhone ID. First introduced last year, iPhone users will be able to present a driver’s licence or ID stored in the Wallet app at participating businesses and venues.
Businesses using NFC readers will be able to start using this huge quality of life improvement, removing the need for people to carry physical IDs such as passports or driving licences.
For online casino operators, it will mean that user IDs can be checked as part of the sign-up process without them needing to scan their IDs separately.
Loading up a casino app and having ID checked automatically, makes the UX potentially much more seamless and also exciting for operators.
It’s a game-changer even for land-based locations, with guests simply tapping their phone or watch to gain contactless entry.
There is so much more that can be done in our industry if technology allows it and continues to develop, and I think these latest developments by Apple open up very interesting, albeit slightly dystopian, opportunities that will prove fantastically interesting to explore.
Tristram Bates is head of mobile engineering at mkodo and resident Apple and iOS specialist. He is an expert in building award-winning iOS native sportsbook, casino, lottery and bingo apps for regulated markets and has worked on numerous apps which have reached millions of users.
As Microsoft pledges a new, multi-billion dollar investment in OpenAI, iGaming NEXT provides a rundown of some of the most exciting artificial intelligence applications from across the world’s largest tech companies.
Microsoft and OpenAI: Time to scale
Microsoft announced the third phase of its partnership with ChatGPT owner OpenAI yesterday (23 January), confirming it had made a “multi-billion dollar investment” in the firm which has this year taken the tech world by storm.
ChatGPT – first released in November 2022 – is a chatbot built on OpenAI’s proprietary GPT-3 family of large language models.
The product quickly separated itself from a herd of other AI-based chatbots due to its seemingly near-human command of language, allowing it to provide users with highly detailed and often surprisingly articulate answers to their requests.
While its core function is built around the mimicry of human conversation, the application brings a broad range of functionalities, including the ability to write and debug computer code, compose music, write poetry, format film scripts and even play games.
Clash of the Titans: Apple .Microsoft .Amazon and Google Battle Over AI Dominance pic.twitter.com/DIWKol8JOk
— are you talkin’ to me? (@MixedPie) January 24, 2023
Microsoft’s latest investment in the firm follows on from previous investments in 2019 and 2021. The investment is likely to reach $10bn, according to Bloomberg.
In a blog post yesterday, Microsoft CEO and chairman Satya Nadella said: “In this next phase of our partnership, developers and organisations across industries will have access to the best AI infrastructure, models, and toolchain with [Microsoft cloud service] Azure to build and run their applications.”
Indeed, the latest investment round is intended to provide OpenAI with the ability to scale its products’ availability through the development and deployment of specialised supercomputing systems.
Occasionally at present, disappointed users of ChatGPT are being turned away and told that the product is operating at full capacity, as its popularity continues to grow.
Google: Taking it slow
Google parent company Alphabet, meanwhile, is taking a more cautious approach to the use of AI language models.
While the firm has recognised the undeniable buzz around products like ChatGPT, it has been careful not to rush into releasing a rival of its own.
Google CEO Sundar Pichai and head of AI Jeff Dean told staff at a meeting in December that this was due to the dangers of rushing a release of this kind of technology.
Google already has similar capabilities to what ChatGPT can deliver, the pair insisted, but equally, it has a more valuable reputation to protect and uphold than Silicon Valley-based start-up OpenAI.
As reported by CNBC, Dean said during the meeting it was “important to realise these models have certain types of issues,” namely that the accuracy provided by Google’s core search functionality cannot yet be reproduced inside a chatbot.
Indeed, even OpenAI CEO Sam Altman has recognised the limitations of a model like ChatGPT.
It is “incredibly limited,” he said on Twitter in December, “but good enough at some things to create a misleading impression of greatness”.
ChatGPT is incredibly limited, but good enough at some things to create a misleading impression of greatness.
it's a mistake to be relying on it for anything important right now. it’s a preview of progress; we have lots of work to do on robustness and truthfulness.
— Sam Altman (@sama) December 11, 2022
“It’s a mistake to be relying on it for anything important right now. It’s a preview of progress; we have lots of work to do on robustness and truthfulness,” Altman concluded.
It seems, therefore, that Altman shares at least some of Google’s concerns, namely that while the bot is able to produce impressively eloquent answers to queries, “the danger is that it is confident and wrong a significant fraction of the time.”
Despite the trepidation, do not assume that Google will let the product come to market unchallenged.
The search giant has been working on its own AI-based language model, LaMDA (among other AI applications) and is looking for further products to come over time, according to Dean.
CEO Pichai told staff in December that Google has a lot planned for AI in 2023, before concluding: “This is an area where we need to be bold and responsible, so we have to balance that.”
Meta’s CICERO: At the intersection
Facebook owner Meta, meanwhile, announced in November its new tool CICERO, “an AI agent that negotiates, persuades, and cooperates with people.”
This application exists at the intersection of two core areas of AI research: natural language processing, as used in models like ChatGPT, and strategic reasoning, used in products such as AlphaGo and Pluribus.
In 2019, Pluribus was declared the first AI bot capable of beating human experts in six-player no-limit Texas Hold’em, as it “decisively” took down professional poker players, including two World Series of Poker Main Event winners.
The combination of those two research areas led to the development of CICERO, which Meta announced in November was the first AI to achieve human-level performance in the strategy game Diplomacy.
This set the product apart from other AI models trained to beat humans in games with fixed variables such as chess, go, or any number of video games.
Playing an online version of Diplomacy, CICERO was able to achieve more than double the average score of human players and rank in the top 10% of participants who played more than one game.
Cicero's, @meta 's AI, won a Diplomacy tournament, including this triumph with England (dark blue).
Those of you who played Diplomacy know you need tactical nous, strategic chops and most importantly a silky diplomatic soft touch to win a game, yet alone a tournament. Daunting! pic.twitter.com/4Go6v6ZwLD
— François Valentin (@Valen10Francois) January 23, 2023
Meta suggested this had long been considered a near-impossible goal for an artificial intelligence to surmount, “because it requires players to master the art of understanding other people’s motivations and perspectives; make complex plans and adjust strategies; and then use natural language to reach agreements with other people, convince them to form partnerships and alliances, and more.”
If an AI cannot recognise when players are bluffing, for example, or cannot predict how players are likely to perceive its own moves, it will fail in a subtle game such as Diplomacy.
Likewise, if it does not convince other players of its humanity, it will not be able to cooperate with them effectively enough to find success.
At present, CICERO is focused solely on playing Diplomacy – perhaps not the most useful application for the technology moving forward.
Underlying this ability, though, is the possibility to create several real world applications for the tech, Meta said.
It will likely be used to improve communication between humans and AI bots, for example by allowing for longer-form conversations during which an AI agent could teach a human a new skill – effectively becoming a near-human teacher for its users.
“We’re excited about the potential for future advances in these areas and seeing how others build on our research,” Meta said.
Apple: The AI buyer
Apple was an early mover into the AI space but has been relatively quiet in recent years, especially compared to some of its competitors.
AI technology of course underlies the capabilities of its virtual assistant, Siri, which has been active since 2011, and also powers the firm’s FaceID technology, which allows users to securely unlock their devices.
Apple has undeniably adopted a “build and buy” approach to AI in recent years, acquiring 25 separate AI companies between 2016 and 2020 according to Brazilian tech journalist Filipe Espósito. Google, by comparison, acquired 14 over the same period.
The firm is taking a broad approach to AI functionality, acquiring a range of businesses such as home security camera start-up Lighthouse AI, autonomous vehicle firm Drive.ai, and AI Music.
While the firm continues to invest heavily in AI, major announcements have not been forthcoming in recent years.
Apple continues to advertise positions for employees working within AI and machine learning, in order to help build “amazing experiences into every Apple product, allowing millions to do what they never imagined.”
The business is currently advertising roles in machine learning infrastructure, deep learning and reinforcement learning, natural language processing and speech technologies, computer vision and applied research.
Earlier this month, the firm unveiled a suite of AI-voiced audiobooks, with a view to capitalising on the fast-growing medium, which is predicted to become a $35bn market by 2030.
Amazon: Integrating AI across a business
Amazon is undeniably an industry leader in the fields of artificial intelligence and machine learning. The firm uses the technologies to help solve a vast array of problems, from optimising processes in its warehouses to interacting with end-users via its Alexa virtual assistant.
The tech giant was an early mover in the space and now offers other businesses the chance to capitalise on its technology through Amazon Web Services (AWS).
Services include anomaly and fraud detection, as well as content personalisation and the reduction of customer churn for retailers, all of which use Amazon’s proprietary machine learning technology.
The company also relies on deep learning – a branch of machine learning that involves layering algorithms in order to better understand data – for use cases such as speech recognition and natural language understanding, image and video classification, and for powering recommendation engines.
1/ 🤖🛍️ Artificial Intelligence has been a trending topic in recent months, and business owners are in the midst of a golden opportunity to take advantage of this technology
But companies like Amazon have been taking advantage of AI for years, here are a few examples: pic.twitter.com/u1GBzq6ynN
— Manny Scripts Ⓜ️ (@mannyscripts) January 24, 2023
Those uses all contribute to Amazon’s unparalleled success – with 56.7% of all US online retail purchases taking place via the retailer in 2021, according to Pymnts.
In October last year, the firm held an Innovation Day celebrating 20 years of experience in AI and machine learning (ML).
“The use of ML isn’t slowing down anytime soon, because ML helps Amazon exceed customer expectations for convenience, cost, and delivery speed,” the firm said in a related blog post.
While Jeff Bezos’s business has made AI and machine learning a core component of its success over the last two decades, using the technology to optimise its processes and reduce its costs, thereby delivering ‘death by a thousand cuts’ to its competitors.
The future’s not ours to see
The race to develop useful AI is most certainly heating up in 2023. While leading companies continue to help the technology scale, innovative start-ups like OpenAI are constantly pushing the boundaries.
The way we interact with technology is undergoing a paradigm shift, and it’s fair to say that AI will become an increasingly significant part of both our working and personal lives in the future.
Earlier this month, iGaming NEXT investigated the gambling industry’s increased investment in AI, a developing trend as companies in the space prioritise profitability.