Amazon has agreed to settle a protracted class-action lawsuit concerning the distribution of virtual casino chips, potentially providing over $200 million to affected class members.
Court filings from the U.S. District Court for the Western District of Washington reveal that Amazon seeks preliminary approval for the settlement related to a complaint first lodged in November 2023 by Nevada resident Steven Horn. Horn alleged that Amazon breached the Consumer Protection Act and Washington gambling laws by facilitating illegal gambling transactions through social casino apps on the Amazon Appstore. The lawsuit claims that Amazon is the "exclusive payment processor for in-app purchases" of virtual casino chips in these apps, taking a 30% cut from every transaction.
While Amazon disputed these claims initially, the company is now moving towards settlement.
If approved by a District Court judge, the proposed settlement would allow class members to claim $201 million in damages with a notable stipulation affecting 32 gaming developers. Specifically, it calls for class members to refrain from executing the judgment against Amazon, instead establishing a litigation trust where they are the sole beneficiaries.
This trust mechanism enables members to seek reimbursement from the developers utilizing "Amazon’s contractual indemnification rights" against app creators. Notably, the settlement figure corresponds to 30% of the total amount class members spent on social casino apps during the designated time frame.
Additionally, Amazon is obligated to contribute $2.5 million to cover various upfront costs associated with the class notice and settlement administration.
This litigation trust will be known as the Edelson PC Amazon Social Casino Litigation Trust. According to the motion for preliminary approval, which did not face opposition, this framework allows the class to potentially recover a significant portion of their damages directly from the developers, aligning with outcomes from prior settlements with those developers.
The agreement also effectively resolves all claims against Amazon.
Amazon is not the only tech giant facing scrutiny; Apple, Meta, and Google are also contending with legal challenges related to social casinos. In 2024, a New Jersey resident filed a class-action lawsuit naming Apple, Google, and various sweepstakes casino operators, accusing them of facilitating the operation of these sweepstakes casino sites. They now face Racketeer Influenced and Corrupt Organizations Act (RICO) charges. U.S. District Court Judge Edward Davila denied attempts by Apple, Google, and Meta to dismiss these class-action suits, which allege that these companies profit from social casino platforms that may contribute to gambling addiction.
