The e-commerce behemoth, Amazon, is currently facing legal hurdles due to its “habit-forming” social gaming applications.
A Nevada resident, Steven Horne, has filed a lawsuit against Amazon, claiming that the company benefits from social casino games that Horne believes should be categorized as unlawful.
The class-action lawsuit asserts that these social casino apps are accessible for download on Amazon and are free to engage with. While players cannot win actual cash, they can purchase additional virtual tokens when their supply dwindles.
Consequently, the lawsuit maintains that social casino games are “profitable” and “highly addictive,” mirroring traditional slot machines found in Las Vegas. The lawsuit criticizes Amazon’s involvement in the process. The complaint alleges that Amazon permits the download of these games despite recognizing their inherent illegality.
In 2018, a comparable lawsuit was initiated against International Game Technology (IGT) and its former subsidiary, DoubleDown Interactive. The lawsuit claimed that IGT’s social casino products utilizing virtual tokens constituted illicit gambling under Washington state law.
During the eighth month of 2022, IGT and DoubleDown came to a resolution with Amazon for a substantial sum of money, equating to $415 million.
The legal action sought the return of Amazon’s purportedly unlawful earnings.
The legal action aimed to compel Amazon to cease its involvement in social casino games. It also demanded the return of any funds allegedly gained illegally from these games to the players.
The legal action explicitly named 34 social casino brands. These included Jackpot Party, Monopoly Slots – Casino Games, Lotsa Slots, Jackpot Master, Black Diamond Casino, and Quick Hit Slots. Furthermore, the legal action mentioned Big Fish Casino, a social casino app previously declared unlawful by a Washington court.
The legal action asserted: “Social casinos are exceptionally lucrative due to their combination of the addictive nature of conventional slot machines with Amazon’s capacity to utilize extensive data and social network influence to identify, target, and exploit vulnerable consumers.”
“In essence, social casino apps cannot operate and generate profits from these illicit games independently. Their business of targeting, retaining, and accumulating addicted gamblers’ losses is inextricably linked to Amazon.
“Amazon not only possesses complete control over granting social casinos access to its store and their distribution and promotion within the store, but it also directly shares a significant portion of the gamblers’ losses, which are collected and managed by Amazon.”
Amazon receives a 30% share from every wager placed.
Based on information from Statista, a legal claim alleges that wagering on social casinos in 2020 was estimated at six billion dollars (four point eight eight billion pounds/five point fifty nine billion euros). The legal action further asserts that Amazon profits from this.
The legal action asserts that Amazon takes a thirty percent cut from every wager placed on social casino games. In comparison, conventional casinos take a cut of between one percent and fifteen percent from real-money slot machines.
According to Statista, this indicates that Amazon earned one point eight billion dollars from these games in 2020.
“By utilizing Amazon for distribution and payments, social casinos have established a mutually beneficial business partnership,” the legal action states. “In return, Amazon distributes their casino games, provides valuable data and insights about their players, and collects funds from consumers, earning billions of dollars by taking a thirty percent commission on every bet.
“The outcome (and intention) of this dangerous partnership is consumers becoming addicted to social casino apps, spending tens of thousands or even hundreds of thousands of dollars on credit cards.
“Consumers addicted to social casinos suffer various non-economic losses, ranging from depression to divorce to suicide attempts.”
The legal ambiguity of social casinos
Social casinos are legal in most of the United States, but there is still uncertainty. The legal action cites a 2018 ruling by a Washington court that found casino apps to be illegal.
A legal dispute in Washington state is aiming at Churchill Downs racetrack and the Big Fish Casino, a social gaming platform. The court has ruled that the virtual tokens used in the casino are actually valuable, signifying that the games constitute a form of gambling.
The fresh lawsuit alleges that Amazon was aware of the illegality of social casinos but still permitted slot machine games, enticed players, and acted as a financial institution, retaining 30% of the earnings.
The lawsuit contends that Amazon is liable for its involvement in unlawful gambling activities.
Amazon has not yet provided a response to the case.
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