Illegal Gambling Case Against Facebook, Apple & Google Combines
Lawsuits filed against Apple, Facebook, and Google alleging the companies allowed illegal gambling have now been combined into one complaint.
Several lawsuits filed against major companies like Facebook, Apple, and Google involving illegal gambling have now been combined into a single complaint. The filing was made this week within the US District Court for the Northern District of California. There are 25 total plaintiffs in the filing, all alleging that the platforms have signed partnership deals with slot companies to allow illegal gambling via social casino products.
Free-To-Play App Argument
The companies listed in the lawsuit offer free-to-play apps that allow users to enjoy games that are similar to real casino titles like blackjack and slots. Players use virtual chips to play which are free but real money can be used to purchase more. The virtual currency cannot be removed as actual money.
The plaintiffs in the case say that they have been harmed financially due to the social casinos on the tech platforms. In the filing, it states that the social casinos and digital platforms are offering illegal gambling due to marketing the titles and processing payments.
In the suit it claims that the games are like slots in Las Vegas, both highly addictive and profitable. Social casinos use elements like traditional slot games, combined with social networking sites and big data to exploit consumers, according to the lawsuit.
In 2020 alone, consumers purchased around $6 billion in virtual chips. Of the top operators, social casinos are in the mix along with Facebook. One of the biggest revenue generators was DoubleDown, a company that should earn around $400 million just from chip purchases in 2021.
DoubleDown keeps the majority of the funds, but IGT also earns a portion, as the company is the license holder for the slot machines that the social gaming site uses. Facebook also receives a cut because that is where the games are offered, according to the lawsuit.
Sites like Facebook have offered casino style gaming for years and players are so used to it, they don’t give it a second thought. The company offers the gaming option in a legal sense because they do not require funds to play, which is the technical definition of gambling. Because chips or virtual currency is provided for free, the sites are not considered a casino per se.
Several cases have popped up over the years and they all have the same argument. The social gaming sites and developers say the gaming option is completely legal while opponents say that the activity is illegal.
The legal definition of gambling in most states is that something of value is risked on a game of chance or a future event and offers an item of value in return. With the social gaming option, players are enjoying slots and table games with virtual currency, which has no value.
For many years, the social casinos were able to continue to operate due to the fact that virtual chips or coins have no value. However, in early 2018, a Ninth Circuit US Court of Appeals judge ruled that virtual chips were a thing of value. In the ruling, Big Fish saw its social casino games deemed illegal in Washington State, which severely hurt the company’s overall business.
In this recent filing, the plaintiffs say that the social casino games are illegal in several states including California. The individual involved in the lawsuit want to see the court stop the platforms from offering the casino games and return the profits gained. It will be interesting to see how this case plays out as social casinos are a common occurrence in several states within the US and a negative outcome on the side of the operator would cause extensive damage to the industry.