The e-commerce behemoth, Amazon, is encountering legal obstacles due to its “habit-forming” social casino applications.
Amazon has been accused of running an “unlawful” online gambling operation, enabling individuals globally to download and engage in social casino apps, generating billions of dollars in the process.
Amazon is confronting legal challenges for its “addictive” social casino apps.
The legal challenge against the online retail giant claims that the company is profiting from social casino games that should be categorized as illegal. The complainant, Steven Horne, a Nevada resident, is pursuing legal action against Amazon for profiting from what he believes should be categorized as illicit social casino games.
The class-action lawsuit explains that social casinos can be obtained from Amazon and are free to play. Participants cannot win real money, but they can purchase virtual chips when they exhaust their supply.
The lawsuit argues that social casino games are “profitable” and “highly addictive,” comparable to Las Vegas-style slot machines. It criticizes Amazon’s involvement in the process, asserting that the company permits these games to be downloaded despite knowing they are inherently illegal.
In 2018, a similar legal action was initiated against International Game Technology (IGT) and its former subsidiary DoubleDown Interactive. The lawsuit alleged that IGT’s social casino products, which utilize virtual chips, constitute illegal gambling under Washington state law.
In the summer of 2022, IGT and DoubleDown finalized an agreement with Amazon for a substantial sum, concluding a legal dispute.
The legal action sought the return of profits Amazon had acquired through alleged illicit practices. The suit aimed to compel Amazon to cease participation in social casino gaming and demanded the return of any funds allegedly gained unlawfully from these games to players.
The lawsuit explicitly named a significant number of social casino brands, including Jackpot Party, Monopoly Slots, Lotsa Slots, Jackpot Master, Black Diamond Casino, and Quick Hit Slots. Also included was Big Fish Casino, a social casino application previously declared illegal by a Washington court.
The legal action asserted: “Social casinos achieve remarkable profitability by combining the addictive qualities of conventional slot machines with Amazon’s capacity to leverage extensive data and social network influence to identify, target, and exploit susceptible consumers.”
“In essence, social casino applications could not operate and generate such substantial profits from these unlawful games independently. Their business model of targeting, retaining, and accumulating losses from addicted gamblers is intrinsically linked to Amazon.
“Amazon not only exercises complete authority over granting social casinos access to its store and their distribution and promotion within it, but it also directly partakes in a significant portion of the gamblers’ losses, which are collected and managed by Amazon.”
Amazon retains a substantial portion of every wager.
A legal complaint alleges that virtual casinos generated an approximate $6 billion in bets during 2020. This is how Amazon profits, taking a substantial 30% cut from each bet made on these games. In contrast, conventional casinos only take a percentage ranging from 1% to 15% of actual-money slot machine bets.
The legal action asserts that Amazon’s alliance with virtual casinos is perilous. Amazon supplies distribution, player information, and payment processing for these games, all while collecting a considerable commission. This, according to the lawsuit, has resulted in users becoming hooked on virtual casino applications, spending thousands of dollars on in-app purchases.
The legal action continues by stating that the addiction to these games has caused users to experience depression, marital breakdown, and even attempted suicide.
Although virtual casinos are largely legal in the United States, some legal ambiguity persists. A 2018 ruling by a Washington court determined casino applications to be unlawful, emphasizing the ongoing discussion surrounding these platforms.
A judicial body in Washington state has determined that virtual tokens employed within the social gaming platform Big Fish Casino, under the ownership of Churchill Downs, are deemed “items of worth.” Consequently, engaging in gameplay on this platform is now categorized as wagering.
A fresh legal action asserts that Amazon, despite being aware of the illegality of social casinos, steered patrons towards Big Fish Casino and pocketed a 30% share of the earnings. The lawsuit alleges that Amazon effectively functioned as a financial intermediary for the slot machine games, making them a participant in an illicit gambling enterprise.
Amazon has refrained from issuing a statement regarding the legal action.
