A federal judge in California has ruled that Apple, Google, and Meta must face lawsuits that accuse them of promoting illegal gambling by hosting and profiting from casino-style apps, according to Reuters.
The decision, issued Tuesday by U.S. District Judge Edward Davila, denied the companies’ motions to dismiss the proposed class actions, which claim the tech giants played an active role in enabling and profiting from what plaintiffs describe as a “Vegas-style” gambling experience.
Key Takeaways
- Judge allows lawsuits against Meta, Google, and Apple.
- Plaintiffs accuse companies of profiting from casino-style apps.
- Meta updates ad rules amid increased scrutiny of gambling.
At the heart of the lawsuits is the accusation that these companies hosted these apps through platforms such as the App Store, Google Play, and Facebook and processed in-app payments of up to 30%, totalling over $2 billion.
The plaintiffs said this amounts to racketeering and that the apps led to addiction and depression.
The tech firms cited Section 230 of the Communications Decency Act, a rule that usually protects platforms from liability for this type of content. However, Judge Davila ruled that taking payments for these apps did not constitute publishing activity, so the Section 230 defense was invalid.
The companies may appeal the decision to the Ninth U.S. Circuit Court of Appeals. The litigation began in 2021 and represents a major legal challenge to how tech platforms monetize gaming.
Plaintiff drops similar lawsuit against Google, Apple
In a separate but related case, a lawsuit filed by New Jersey resident Julian Bargo against sweepstakes casino High 5 Casino, along with Apple and Google, was recently withdrawn without explanation. Bargo said he lost over $1,000 and that the companies were in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act by enabling illegal gambling.
Unlike traditional online casinos, sweepstakes casinos use two virtual currencies, and Bargo alleged this is used to exploit legal loopholes and offer illegal gambling.
The exact reason for the lawsuit's withdrawal remains unclear, but legal experts saw that taking on major tech companies like Apple and Google may have posed a significant financial burden.
Meta tightens ad rules for gambling
Meanwhile, Meta recently launched stricter ad policies on Facebook and Instagram for gambling content.
The new rules mean all advertisers promoting real-money gambling must gain formal authorization through Meta’s Business Suite. Influencer marketing is also addressed under the new policy, whereby influencers must register as affiliates and await approval before promoting gambling content.
The regulatory shift comes as several U.S. lawmakers push for stricter gambling ad laws. In New Jersey, Assemblyman Brian Bergen introduced a bill to ban sports betting ads, while Florida legislators have been working to bring in criminal penalties for promoting illegal gambling.
