Posted: Nov 25, 2021, 6:35 a.m.
Last update on: November 25, 2021, 6:35 a.m.
A series of lawsuits against Facebook, Apple and Google alleging illegal gambling have been consolidated into one main complaint in the U.S. District Court for the Northern District of California.
The combined and amended complaint now lists 25 complainants. He alleges that US technology platforms have formed “dangerous partnerships” with some of the world’s largest slot companies to create “an illegal gambling conspiracy” in the form of social casino products.
Free-to-play applications allow users to play games that look like real casino games but with virtual chips. These can be topped up with real money, but cannot be withdrawn as fiat currency. Social casinos use stimulating graphics and behavioral prompts which can create a stress loop for the user.
All of the plaintiffs claim to have been harmed financially by this allegedly ungodly alliance of social casinos and the digital platforms that host them, market them and process payments.
âLike the Las Vegas slot machines, social casinos are extraordinarily profitable and highly addictive,â the lawsuit says. âSocial casinos are so lucrative because they blend the addictive aspects of traditional slots with the power of platformsâ¦
Last year, consumers bought around $ 6 billion worth of virtual chips. Of the twelve most profitable apps on Facebook, nine are social casinos.
The biggest of them, DoubleDown, is expected to generate around $ 400 million in chip purchases this year, according to the complaint. Of that amount, DoubleDown will keep $ 240 million and $ 40 million will go to Rhode Island-based gaming technology company IGT, which licenses the intellectual property of the slots to DoubleDown, according to the lawsuit. The remainder, $ 120 million, will go to Facebook and other platforms that host DoubleDown games, according to the lawsuit.
Big fish for frying
There have been numerous cases over the past decade accusing social game developers and publishers of illegal gambling. Most have failed. This is because the legal definition of gambling in most jurisdictions requires that something of value be risked on a gambling or future event to receive something of value in return.
Since the virtual social casino chips could not be considered “something of value” in the real world, the games could not be classified as gambling.
But in March 2018, a U.S. Ninth Circuit Court of Appeals judge ruled that virtual chips are indeed valuable and therefore Big Fish’s social casino games are illegal gambling in the United States. Washington State.
The 25 plaintiffs cite this case as saying that social casino gambling is also illegal in California and several other states.
They are asking the court to order the platforms to stop offering social casino games and return the profits. They are bringing class action claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act, California Unfair Competition Act, and various state gambling and consumer protection laws.