Amazon has been accused of participating in a “illegal” gambling scheme by allowing users to play and download social casino applications around the globe, earning billions in the process.
A legal case has been filed against Amazon.com. Steven Horn is the plaintiff in a lawsuit against Amazon. He believes that Amazon should not be profiting off social casino games.
Social casinos are available for free download from Amazon. The players cannot win real money, but they can buy virtual chips when their chips run out.
The lawsuit claims that social casino games, like Las Vegas style slots, are “extraordinarily lucrative” and “highly addicting”. Amazon is criticized for its role. It is claimed that Amazon allows illegal games to be downloaded, despite its knowledge.
A similar lawsuit was brought in 2018 against International Game Technology and DoubleDown Interactive, its former subsidiary. In the suit, IGT was accused of illegal gambling in Washington State for its social casino games that use virtual chips.
In August 2022, IGT and DoubleDown settled the suit for $415m (PS333.9m/EUR383.7m).
Amazon sued for “illegal” sales
In the lawsuit, Amazon is being forced to cease participating in casino-style games. The lawsuit also demands that any “illegally gained” money from social casino games be returned to the consumers.
The lawsuit directly names 34 different social casino brands. The lawsuit names 34 social casino brands, including Jackpot Party, Monopoly Slots Casino Games, Lotsa Slots Jackpot Master, Black Diamond Casino, and Quick Hit Slots. Big Fish Casino is also named, the social gambling app that was ruled illegal by a Washington court several year ago.
The lawsuit claims that “Social Casinos are lucrative because they combine the addictive qualities of slot machines and the power of Amazon, which leverages big data and the social pressures of the network to target and exploit customers prone to addiction behaviours.”
Simply put, social casino apps cannot and will not operate or profit in such high levels from illegal games. Amazon is integral to their business, which involves retargeting and retaining addicted gamblers as well as collecting the losses.
Amazon shares a significant portion of gambling losses that are controlled and collected by Amazon.
Amazon shares 30% of every wager
Statista research is used in the lawsuit to estimate that $6.00bn (4.88bn PS/EUR5.59bn) will be lost on social casino games by 2020. Amazon’s money is made in social casinos, according to the lawsuit.
Amazon is alleged to take 30% from each bet placed in social casino games. The traditional casino takes between 1% to 15% of the real money slot machines.
Statista’s figures suggest that Amazon will generate $1.8bn in revenue from games like these by 2020.
The complaint states that “by using Amazon as a payment and distribution channel, social casinos have entered into an agreement for mutual benefit.” Amazon earns billions of dollars in revenue by taking a 30 percent commission on every bet. This is because it distributes the games and provides them with valuable information about players.
The result of the dangerous partnership, and its intention, is that users become addicted to these social casino apps. They max out their credit card with hundreds or thousands of dollars in purchases.
Consumers addicted to social casino games suffer from a wide range of damages, including depression, divorce and attempted suicide.
Social casinos: Legal uncertainty
In the US social casinos are legal to a large extent, however there is still uncertainty. This lawsuit was based on a Washington state court ruling that declared casino apps illegal in 2018.
In the Washington case, Churchill Downs was referred to as well as Big Fish Casino. The court ruled that virtual chips in the casino could be classified as “things of value”, and thus playing the game can be considered gambling.
The new lawsuit states that “despite Amazon knowing that social casinos are against the law, it continues to have a financial interest of 30% in the outcome by brokering slot machines, directing customers there and acting as a bank.”
Amazon, as such is responsible for being a conspirator in an illegal gambling operation and conspiracy.
Amazon has yet to respond to this case in an official manner.
