Amazon Facing Lawsuit over Social Casinos in Washington State

Amazon.com Inc. is currently embroiled in a significant legal challenge, accused of offering more than 30 so-called social casino apps to players in Washington state. The controversial business model is illegal in the state.

The latest lawsuit, filed on November 10 in the U.S. District Court for the Western District of Washington, calls out Amazon’s involvement in various social casino operations.

Social casinos offer slots style games, using tickets purchased via their app rather than actual cash wagers. They are a legal grey area in many states. But in recent years, Washington in particular has taken a hard line on the practice.

This has led to many class action lawsuits against social casino operators who have previously provided services in the state.

This latest case, titled Steve Horn v. Amazon.com Inc., seeks restitution, damages, and injunctive relief from Amazon’s alleged participation in this enterprise.

“Despite knowing that social casinos are illegal, Amazon continues to maintain a 30% financial interest in the upside by brokering the slot machine games, driving customers to them, and acting as the bank,” the lawsuit claims, as published by Thomson Reuters.

Dangerous Partnership, Lawsuit Says

The lawsuit highlights Amazon’s role in operating an app store where users can download the online casino style platforms.

These apps, while free to play, require users to purchase virtual chips to continue playing. But these chips cannot be cashed out.

Some 30 brands are named in the lawsuit, including Jackpot Party, Lotsa Slots and, specifically, Big Fish Casino. Big Fish was the operator at the center of the 2018 lawsuit that set the precedent in Washington State.

The case has brought to light the impact of these apps on consumers. Initiated by a Nevada resident who self-identified as an addict of illegal online slot games, the lawsuit emphasizes the “dangerous partnership” Amazon has formed with virtual casinos.

“Defendant Amazon, for its part, is a direct participant in an informal association and enterprise of individuals and entities with the explicit purpose of knowingly devising and operating an online gambling scheme to exploit consumers and reap billions in profits,” lawyers for Chicago-based law firm Edelson said in the suit.

A 2018 U.S. appeals court ruling, which declared social casinos illegal under Washington state gambling law, is a key component of the lawsuit. This ruling has set a precedent that could significantly impact the outcome of this case.

“Through this case, Plaintiff seeks to force Amazon to stop participating in, and to return to consumers, the money it has illegally profited from the Social Casino Application Enterprise,” the suit said.

Related: Actual, real money Washington state online casinos, rated and reviewed

The Broader Context and Future Implications

This lawsuit against Amazon is part of a larger trend of legal challenges faced by major tech companies over their involvement with social casino apps.

Apple, Meta, and Google are currently facing similar lawsuits, with cases pending in the 9th U.S. Circuit Court.

Another similar case earlier in 2023 ended in one of the biggest gambling-related settlement payouts of recent years.

Back in June, online slots developer International Game Technology and its former social casino subsidiary, DoubleDown, paid out $419 million to settle a class action case originally filed in 2018.

Lawyers behind this latest lawsuit against Amazon say they approached research firm Statista, who told them that the social casino market brings in some $6 billion a year across the U.S. Amazon has not commented on the case so far.

The 28 physical Washington casinos are all run by the state’s various native tribes. Not one operator has yet commented on this case, or other social gaming lawsuits in the state, despite the potential effects on their market share.