Apple Facing Lawsuit Over Illegal Gambling in California
The Apple company is currently facing a lawsuit in the state of California due to a social casino app being dubbed illegal gambling.
When it comes to gambling services in the United States, companies must adhere to local laws and protocols in order to ensure they are providing services in the right manner. Any breaking of such laws can lead to lawsuits, fines, even the loss of licensing. The Apple company is not one that dabbles in the gambling industry, but they have found themselves part of a lawsuit in the state of California. The company has been accused of providing illegal gambling services and being in violation of laws in the state, which reflect a ban on slot machine games.
The complaint was filed late last week in the US District Court for the Northern District of California. In the filing, it claims the company distributes free-play social casino games in its app store and this is like a casino in Las Vegas, taking a cut from the proceeds of games. However, for Apple, the cut is much higher. Apple reportedly makes as much as 30% from in-app purchases.
The lawsuit claims that the result and intent of the partnership with social casino games is that customers become addicted to the apps and will max out their credit cards, making purchases in the tens of thousands or more.
For Apple, the company says they have a compliance policy in the jurisdictions where they operate. They follow the law to the letter when it comes to such services, in the company’s opinion.
The plaintiffs in this case are Cheree Bibbs and Donald Nelson. They claim to have spend a minimum of $15,000 each on social casino games. They used virtual chips to play slot machines like those in Las Vegas. The chips to play are free at first, but once you run out, players are encouraged to purchase more.
The apps incentivize buying more chips by offering new achievements for those that do like leveling up or offering new games. The plaintiffs want to see Apple pay for their behavior, as they feel it was unlawful. They would like to receive damages in the amount of the losses as well as for the ill-gotten gains of the company.
Is it Gambling Though?
For years, using virtual chips and providing no payout has been a point of contention when it comes to apps and their connection to gambling. Some feel that these social games are a form of gambling while others do not.
Basically, the definition of gambling is that there is a risk with the potential to earn a payout, winning something of value. With these social casinos, the chips you win or can purchase, really do not have a value.
Several cases such as this one have popped up across the United States over the years and the same argument applies. In most cases, the companies win out. However, back in early 2018, the ruling went towards the plaintiff.
Big Fish Casino’s games were under fire, and a federal appeals court ruled that the virtual chips used in the games were something of value. Due to this ruling, the company was found to be in violation of Washington state gambling laws.
The owner of Big Fish, Churchill Downs, had to pay $124 million and $31 million in order to settle the lawsuit.
It’s interesting to note the basis of the lawsuits. Players have spent hundreds or thousands of dollars to play the games and then suddenly take issue with the legality of what they are doing. In many cases, it seems that the plaintiffs are trying to take advantage of legal loopholes in order to earn back what they spent playing games.