Amazon Faces Legal Issues Over “Addictive” Online Casino Apps

Amazon is accused of being involved in illegal online gambling operations, allowing people worldwide to download social casino apps and play them, earning billions of dollars in the process.

Legal claims have been filed against the American online commerce giant Amazon. The plaintiff, Nevada resident Steven Horn, is suing the company for profiting from games in social casinos, which he argues should be classified as illegal.

Where's the Money, Lebowski?

The lawsuit clarifies that various online casino applications can be downloaded for free from Amazon. While it's impossible to win real money in these games, players can purchase virtual chips for continued play.

The complaint alleges that, similar to Las Vegas-style slots, these online casino games are "extremely profitable" and "highly addictive." Amazon's involvement in this process is criticized. The lawsuit contends that the company allows the downloading of these games, despite knowing their inherently illegal nature.

Precedents

In 2018, a similar lawsuit was filed against International Game Technology (IGT) and its former subsidiary, DoubleDown Interactive. It was claimed that IGT's social casino products, which use virtual chips, constituted illegal gambling under the laws of the state of Washington.

In August 2022, IGT and DoubleDown settled the dispute by paying out a lawsuit amounting to $415 million (333.9 million GBP / 383.7 million EUR).

Now, in a legal action, Amazon is being asked to return its "illegal" revenues.

Accusations and Demands

The claim is aimed at forcing Amazon to cease its involvement in online casino activities. The lawsuit also demands the return of any money that the company has "illegally" earned from these games to the consumers.

The accusation involves 34 brands of social casinos. Among them are Jackpot Party and Monopoly Slots – casino games, Lotsa Slots, Jackpot Master, Black Diamond Casino, and Quick Hit Slots. Also named is Big Fish Casino – an online casino app that was declared illegal by a Washington court several years ago.

"Online casinos are incredibly profitable for their owners and potentially dangerous for players. Online games can be as addictive as traditional slot machines, and Amazon also has vast access to various personal data of users, including through social networks, to identify a target audience prone to addictive behavior and potentially manipulate it.

Online casino applications themselves cannot earn such a level of profit from illegal games. The business of recovering losses from addicted players, as well as searching for and attracting potential gambling clients, is inextricably linked with Amazon.

The company not only maintains full control over the admission of online casinos to its shopping platform, their distribution, and promotion, but also directly influences the significant losses of players, whom Amazon itself attracts," states the lawsuit.

Amazon Earns 30% Profit from Each Bet

According to a Statista study, around $6.00 billion USD (4.88 billion GBP / 5.59 billion EUR) was spent in online casinos in 2020. The legal claim specifies that it is from this activity that Amazon earns its money.

The lawsuit states that Amazon takes 30% of the amount of each bet made in social casino games. In contrast, traditional casinos earn between 1% to 15% from real money slot machines.

Using Statista's data, it can be inferred that Amazon earned $1.8 billion in 2020 through this method.

"Amazon and online casinos have established a mutually beneficial business partnership. In exchange for advertising gambling games on its platform, providing casinos with valuable personal data about their players, and conducting transactions with consumers, Amazon takes a commission of 30% from each bet, earning billions in revenue," states the complaint.

As a result of this dangerous partnership, consumers become addicted to online casino apps, spending everything on their credit cards, making transfers of tens or even hundreds of thousands of dollars.

Furthermore, consumers addicted to online casino games suffer from various non-financial problems, ranging from depression to divorce and suicide attempts.

Legal Uncertainty Regarding Online Casinos

Social casinos are mostly legal in the U.S., but there have been precedents that contradict this. As previously mentioned, a 2018 Washington court decision declared online casino apps illegal.

The case in Washington involved the racetrack and gambling company Churchill Downs Incorporated and Big Fish Casino. In its ruling, the court stated that virtual chips in the casino should be classified as "things of value," thus making the game a form of gambling.

"Therefore, if Amazon is aware of the illegality of social casinos but continues to earn a 30% financial profit, acting as an intermediary in online games, attracting customers to them, and acting as a bank, it bears responsibility as an accomplice in illegal gambling business and conspiracy," concludes the lawsuit.

Amazon has not yet published an official response to the legal claim.