The lawsuit accuses Google and Apple of having a role in the distribution of illegal gambling.
Tech giants Google and Apple are facing new legal scrutiny in New Jersey. The pair are named in a lawsuit accusing them of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. The lawsuit, filed 27 November, targets their involvement in hosting sweepstakes casino apps, a growing sector that has stirred significant controversy due to its unique operating model and regulatory ambiguities.
The lead plaintiff, Julian Bargo, claims he lost more than $1,000 on sweepstakes casinos. Apple and Google are two of five named defendants.
Social casinos allow users to play for free or to spend money on virtual currency. The virtual currency can then unlock features in games often associated with gambling, such as slot machines, blackjack and roulette. Some social casinos have gone further to add sweepstakes components, such as real-money prizing.
While these platforms are popular for their accessibility and entertainment value, and appear to comport with current applicable laws although they vary by state, critics argue that they essentially turn smartphones into unregulated gambling devices.
Sweepstakes aren’t licensed or regulated
Unlike traditional casinos, sweepstakes operators are not licensed or regulated in the US. As such, they avoid paying gaming taxes, despite primarily targeting American consumers. In addition, most of the major sweepstakes casino operators are based offshore.
Australia-based Virtual Gaming Worlds (VGW), which runs Chumba Casino, LuckyLand Slots and Global Poker, exemplifies the industry’s success. In 2023, it reported $4 billion (£3.7 billion/€3.8 billion) in revenue, including $322 million in net earnings.
As recently pointed out in The Washington Post, its financial success has allowed it to sponsor Ferrari’s Formula One team and collaborate with high-profile celebrities like Ryan Seacrest, Michael Phelps and DJ Khaled to promote its platforms.
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