Apple, Google, Meta say they didn’t get a cut from casino apps, ask judge to toss gambling class action
SAN JOSE, Calif. (CN) — Apple, Google and Meta asked a federal judge Friday to dismiss a trio of class actions accusing them of illegally providing makers of casino-style gambling apps hosted on their platforms with customers’ data to help target vulnerable people with gambling addictions in exchange for a share of the profits.
In the sprawling multi-district lawsuit, the plaintiffs claim the companies violated federal law as well as state gambling and consumer protection laws.
The Silicon Valley giants disputes that user activity on the social apps amounted to gambling, and stated that it didn’t take a portion of any “winnings” — only a commission fee of up to 30% on all in-app purchases, including the virtual currency needed to play the slots.
“Playing these games no more makes me a gambler than playing NFL makes me a football player,” said Christopher Chorba of Gibson, Dunn & Crutcher, who represented Meta.
But the plaintiffs remained adamant in their accusations. “With names like ‘Infinity Slots’ and ‘Lots of slots,’ it’s very clear what’s going on here — chips are being bought and sold in front of a slot machine,” attorney Todd Logan of Edelson PC, who represented the plaintiffs, told the court.
The tech companies primarily argued for their immunity under Section 230 of the Communications Decency Act, which courts generally have interpreted to shield Internet companies from liability for third-party content created by users. The law is meant to prevent a deluge of lawsuits from anyone who feels wronged by something someone else has posted online.
The companies also distanced themselves from what their consumers do with their purchases, arguing they were less a “bookie,” as the court previously called them, and more like a credit card company — processing payments without being directly involved with the apps.
“There is no statute saying that processing payments for virtual currencies is unlawful,” said Teresa Michaud of Cooley, who represented Google.
If the court were to continue with this case, they argued, it would be opening its doors to lawsuits aimed at holding VISA and MasterCard liable for any purchases made on their platforms, too.
The companies also argued buying virtual chips didn’t necessarily mean users were going to gamble with them.
“Within the games at issue, there are transactions that do not constitute illegal gambling, like gifting in-game currency to other players or playing bingo,” Michaud said.
When it came to state gambling loss laws, which allow plaintiffs to recover losses from winning parties under certain circumstances, the companies argued they were not “winners” and thus could not be sued under the statutes. In the same vein, they maintained that their 30% commission isn't a portion of the “winnings” either.
“It’s not profit-sharing. It’s simply facilitating a transaction,” Colin McGrath of DLA Piper, who represented Apple, told the court.
The plaintiffs insisted the companies were just re-labeling their activity. “We can use any number of terms. They are selling chips and buying chips,” Logan said.
Apple, Google and Meta did not respond to a request for comment by press time and neither did a spokesperson for the plaintiffs.
In separate lawsuits filed mid-2021, 26 plaintiffs from 19 states say the casino-style apps, which operate across state lines through the Apple App Store, Google Play Store and Facebook platforms and style themselves after Vegas-style slot machines, constitute an “illegal internet gambling enterprise” that's even worse than in-person casinos: They have access to detailed consumer data facilitated by their platforms, making them “extraordinarily profitable and highly addictive.”
The plaintiffs detailed their claims against all three companies through an amended master complaint in November 2024. All three tech companies moved to dismiss the case later the same month.
U.S. District Judge Edward J. Davila, a Barack Obama appointee, did not indicate when he would issue a ruling. The case is in the Northern District of California and was heard in the Robert F. Peckham Courthouse in San Jose, California.
The Ninth Circuit heard an appeal of a previous motion to dismiss this case in April 2024.
Casino-style apps have risen in popularity in recent years, particularly on mobile platforms. In 2020, consumers purchased an estimated $6 billion in social casino virtual chips. Of the top twelve grossing apps available on Facebook in 2021, nine were social casinos.
https://www.courthousenews.com/apple-google-meta-say-they-didnt-get-a-cut-from-casino-apps-ask-judge-to-toss-gambling-class-action/