Apple, Meta, and Google Casino App Legal Battle Goes to Appeals Court

Article ByDavid Weir

July 27, 2023

Spread the Word:

Posted in: US Gambling News, California Gambling News, US Casino News

In a case that could redefine the boundaries of tech company liability, Apple, Meta, and Google are appealing a 2022 ruling that suggested they could be classified as “bookies.”

The ruling, made by U.S. District Judge Edward Davila, posited that Section 230 of the Communications Decency Act may not protect these platforms from claims that they acted as bookmakers. That’s because they facilitated and earned commissions on the sale of virtual chips in online “social casino” apps.

The three major U.S tech giants are now appealing that ruling via the U.S Court of Appeals for the 9th Circuit in San Francisco, California (pictured).

If they aren’t allowed legal protection under the Act, it could open them up to a flood of class-action lawsuits from prior customers of social casino apps that are shut down or proved illegal.

Social casinos don’t offer any monetary prizes in their games, except more chips, meaning players are not technically gambling for or with money. However, that hasn’t stopped lawsuits against them in the past, leading to protracted legal wrangling.

Such a case occurred recently when International Game Technology settled a $419 million lawsuit over its social casino operation, DoubleDown. Neither party admitted any wrongdoing, but it was an expensive price to pay for the operator.

Related: Our expert and detailed guide to each U.S. state’s gambling laws

Potential Implications for the Internet Economy

In this new case, each tech company has filed a separate appeal, arguing that Judge Davila’s interpretation of a key precedent could have severe consequences for the internet economy.

They warn that if the ruling stands, every website offering in-app purchases could be exposed to liability whenever a plaintiff claims an injury from an unlawful product. The plaintiff’s theory for circumventing Section 230 immunity has been described by Apple’s lawyers as “limitless,” indicating the potential breadth of its impact.

In this specific case of social casinos, as referenced by the initial ruling appealed, Meta pointed out that anti-social casino lawsuits have often taken the stance that the transaction is important, not the content thereafter.

“Plaintiffs’ wordplay of isolating the transaction from the content itself would offer an easy end-run around this court’s existing decisions applying Section 230,” Meta said, as reported by Reuters.

“None of which makes protection turn on whether the service received compensation in connection with the purchase of challenged third-party content.”

The Counter Argument and What Lies Ahead

The tech giants maintain that they did not create the chips sold by the allegedly illegal casino apps, nor did they create the apps that encourage users to buy the virtual chips. They argue that they merely offered the casino apps the same payment processing services they provide as publishers.

Therefore, they assert that it’s impossible to separate payment processing from the hosting activity that the previous ruling found to be immunized under Section 230.

The appeals process is expected to continue until December 2023, and the outcome could set a precedent for how tech companies are held accountable for the content and transactions facilitated through their platforms.

If the ruling is upheld, it could see social casino apps (and many other controversial ventures) deemed no longer worth the financial risk of a lawsuit and potentially their removal from the tech giant’s app platforms.

Between them Apple and Google’s app stores account for 97% of the market, and Meta’s Facebook is the other popular social casino destination. So this appeal will be watched with interest by the social casino sector.