DoubleDown and IGT’s $419M Social Casino Lawsuit Settlement Passes Courts
Casino game maker International Game Technology (IGT) and social casino operator DoubleDown Interactive have been given the all-clear to settle a class action lawsuit against them that began nearly five years ago.
The two companies will pay out $419 million to settle the case, originally filed in Washington in 2018.
Plaintiffs from the state argued that IGT, owner of DoubleDown at the time, violated Washington’s gambling laws through its social casino operation.
After years of court action, the parties agreed on a settlement in August of last year. Seven months later, US District Judge Robert Lasnik has now signed off state approval on the settlement.
“The Court hereby grants final approval to the Settlement and finds that the Settlement is, in all respects, fair, reasonable, and adequate, and in the best interests of the Settlement Class,” Judge Lasnik said.
No Admission of Wrongdoing
Under the terms of the deal, IGT and DoubleDown can maintain their innocence. Anyone involved in the settlement class is permanently barred from participating in any other lawsuits or legal action related to the settlement case.
The case hinged on interpretation of the state law. Social casinos like DoubleDown don’t offer any cash or other prizes, except more chips for more playtime.
This often allows them to get around state gambling laws. However, Washington’s laws have a very specific wording that led to this particular lawsuit.
Because the chips had clear monetary value, with 300k chips for $2.99 on sale at DoubleDown at the time the lawsuit was filed, lawyers working on the suit determined this constituted a chance to win “something of value”.
Thus, it was violating Washington state’s gambling laws.
The $419 million settlement after five years of legal wrangling shows both operators’ desire to avoid further public scrutiny and expensive legal battles with uncertain outcomes.
Risky and Hard Fought
Under the agreement, $121.5 million of the settlement will go to the plaintiff’s lawyers, Chicago-based Edelson.
That equates to about 30% of the settlement. Which is significantly higher than the usual percentage for lawyers in Washington court cases.
However, Judge Lasnik agreed the case was “risky, novel, and hard-fought” enough to grant the legal team’s enhanced fee in this case.
Todd Logan, a lawyer from Edelson who worked on the case, told Reuters that his firm alone has received $651 million in settlements or compensation for clients across social casino lawsuits – although this particular case has been the biggest so far.
That still leaves $290 million to be split among the class action members, including lawsuit lead plaintiffs Adrienne Benson and Mary Simonson.
The majority of the $419 million settlement fee will be paid by UK-based IGT, at $269 million.
DoubleDown interactive, despite being sold off by IGT to Korean company DoubleU Games for $825 million in 2017, will pay $145 million of the settlement.
Many social casinos have faced massive class action lawsuits across various US states in recent years.
Earlier this year Chumba Casino operator Virtual Gaming Worlds settled for $11.75 million in a similar suit in Kentucky.
In all cases, social casino operators have settled, but continued to deny wrongdoing. This means they can avoid a potential business-damaging precedent being set, should a case go against them in court.
Virtual Gaming Worlds also agreed to add some completely free games to its site, meaning players aren’t required to gamble coins to enjoy further gameplay.