A recent legal battle has emerged, casting a spotlight on the often overlooked sector of social casino apps available via online retail heavyweight Amazon. The legal action has been initiated by Nevada local Steven Horn, who has brought the suit against Amazon, accusing the tech giant of complicity in hosting and profiting from social casino games that he deems should be considered illegal gambling enterprises.
At the heart of this contention lies the nature of social casino apps, which can be freely downloaded from Amazon and played without any real-money wagering. Nevertheless, these games offer players the option to purchase virtual chips to continue playing once their original allotment is depleted.
Horn’s class action complaint significantly points out the parallels between these social casino games and traditional Las Vegas-style slot machines. He asserts that they are “extraordinarily profitable” and “highly addictive,” drawing on the influential reach of Amazon to lure in and exploit users, especially those susceptible to gambling addiction. The underlying allegation is that the games are intrinsically tied to Amazon in a business venture that targets, retains, and profits from players with compulsive gambling tendencies.
In the past, similar lawsuits have surfaced challenging the legitimacy of these social casino offerings under state law. A notable case from 2018 against International Game Technology (IGT) and its then-subsidiary DoubleDown Interactive drew attention when IGT’s social casino products using virtual chips were deemed as constituting illegal gambling in Washington state. This legal battle culminated in a hefty $415 million settlement by IGT and DoubleDown.
With this backdrop, Horn’s lawsuit aims to compel Amazon to cease involvement in the social casino game market and to reimburse consumers for moneys asserted to have been “illegally” obtained through these games.
The lawsuit is broad in its reach, highlighting 34 distinct social casino brands. Among them are names such as Jackpot Party, Monopoly Slots – Casino Games, Lotsa Slots, and Big Fish Casino—the latter previously declared illegal by a Washington court. Underpinning the lucrative appeal of social casino apps, the lawsuit argues, is Amazon’s allegedly pivotal role in enabling their accessibility and profiting from the operation.
Under the microscope is also Amazon’s revenue share from these apps, where it is alleged to take a 30% cut of each wager, a stark contrast to the 1-15% taken by traditional casinos from real-money slot games. Based on estimates from market research group Statista, the complaint suggests that in the year 2020 alone, Amazon could have generated approximately $1.8 billion from these social casino games.
Social casino apps occupy a gray area in the US legal landscape; they are legal in most parts, but the lawsuit nods to the 2018 Washington court ruling that declared them illegal by considering virtual chips as a “thing of value.”
The lawsuit paints a grim picture of the consequences faced by consumers who become enmeshed in addiction, detailing troubling outcomes such as massive debt accrual, emotional distress, and even suicidal behavior. It accuses Amazon of having full knowledge of the illegal status of social casino apps, yet maintaining a 30% financial stake in these games’ profitability, effectively constituting a co-conspirator in an illegal gambling operation.
Amazon’s official response to the allegations remains pending, leaving the outcome of this latest legal challenge hanging in the balance. As scrutiny increases, this case might prompt a closer examination of the relationship between e-commerce platforms and the contentious world of social casino apps.
