E-commerce giant Amazon is facing a proposed consumer class-action lawsuit accusing the company of operating an “illegal internet gambling business.”
The lawsuit, filed by a Nevada resident who claims he was addicted to illegal online slot games, alleges that Amazon distributed more than 30 illegal casino-style apps to consumers, creating a “dangerous partnership” with virtual casinos. The complaint cites a 2018 U.S. appeals court decision that declared “social casino” practices illegal under Washington state gambling law. This case is just one of many targeting online gambling platforms.
According to the lawsuit, Amazon and social casinos found a way to bring slot machines that operate 24/7, 365 days a year, into the homes of consumers in the United States. These games are free to play and do not offer cash payments. Instead, users can earn virtual chips and are encouraged to buy more to continue playing. However, despite the knowledge that social casinos are considered illegal, Amazon allegedly maintains a 30% financial interest in these practices by intermediating slot machine games, directing customers to them, and acting as a bank.
Social casino apps have given rise to a number of legal challenges and debates regarding their classification and regulation. In 2022, a California federal judge ruled that Apple, Meta (formerly Facebook) and Google could be held liable for processing payments related to virtual chips used in social casino apps. This decision sparked appeals from these tech giants, and cases are currently pending in the 9th U.S. Circuit Court of Appeals. The consequences of these objections will have significant implications for the future of the online gambling industry.
The class-action lawsuit against Amazon seeks damages, restitution and other court orders on behalf of “tens of thousands of consumers.” The plaintiffs’ law firm, Edelson, has a track record of achieving significant settlements in similar cases involving virtual casino apps. Todd Logan, who runs Edelson’s gambling practice, expressed his expectation to hear the case before a jury of Amazon’s peers. The outcome of this case could set a precedent for future legal battles regarding online gambling platforms and their partnerships.