Amazon reached a proposed class-action settlement that would allow consumers to pursue more than $200 million from the developers of social casino apps available in the company's app store.
Key Takeaways
- Plaintiffs would pursue reimbursement from app developers, not Amazon.
- Social casinos have come under attack across the U.S.
- The settlement will add to more than $650 million recovered in social casino litigation.
The technology, e-commerce, and online marketplace business denied any wrongdoing and filed a proposed settlement last week in Washington State that would not require Amazon to contribute to the settlement fund. Amazon agreed to a $201-million judgment against it and is awaiting final approval from a judge, according to Reuters.
If accepted, plaintiffs would instead seek reimbursement from the casino app developers, not Amazon. Social casinos have come under fire in recent years for allowing users to play online slots and table games through in-app purchases of gold coins, even though players can’t cash out winnings.
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Amazon pledges compliance
Amazon said in a statement that it will “continue offering choice,” but Amazon will require apps to "comply with applicable laws” and retains the ability to remove an app at any time.
The lawsuit alleges Amazon violated state gambling laws and the Consumer Protection Act by being an intermediary between users of social casino apps and their developers, allowing for illegal gambling transactions.
The proposed $201-million judgment represents about 30% of what plaintiffs spent on the apps. Amazon used transaction data for in-app purchases to reach the figure. The class action’s members will share any reimbursed funds from the developers.
Ongoing action
This is just one of many cases throughout the U.S. involving social gaming sites and sweepstakes casinos, which use dual-currency systems that can allow players to redeem certain virtual currency for cash prizes. Other technology companies with app stores, like Google, Apple, and Meta, are also facing class-action lawsuits over these kinds of online casino platforms.
The city of Baltimore filed a lawsuit against social casino operators in March, accusing those companies of offering illegal gambling products. Lawmakers in multiple states have already passed or are trying to pass laws banning unregulated gaming companies from offering their apps in those jurisdictions. Regulators in some states have taken legal action against social and sweepstakes casino operators as well.
The proposed judgment follows more than $650 million recovered through lawsuits involving social casino operators across the U.S.
“The class is poised to recover a significant portion of their total losses that keeps pace with the settlements achieved against the social casino developers,” the lawyers said in court documents.
