Amazon Reaches Proposed Settlement in Social Casino App Case

SEATTLE: Amazon has agreed to a proposed settlement in a class-action lawsuit over social casino apps offered through its Appstore.

The deal could allow consumers to pursue $201 million from third-party app developers, while Amazon denies wrongdoing and avoids paying that amount directly into a settlement fund.

The proposed settlement was filed in the U.S. District Court for the Western District of Washington and still requires judicial approval. It would resolve claims brought in 2023 by Nevada resident Steven Horn, who accused Amazon of violating Washington gambling law and the state’s Consumer Protection Act.

Related: Meta Faces Dutch Legal Action over Illegal Gambling Advertising

Settlement Would Shift Claims to Developers

The lawsuit alleged that Amazon brokered illegal gambling transactions by processing in-app purchases of virtual casino chips in social casino apps available through the Amazon Appstore. Plaintiffs also alleged that Amazon acted as the exclusive payment processor for those purchases and kept a 30% share of each transaction.

Amazon disputed the allegations but has agreed to a settlement structure that would allow class members to seek recovery from app developers instead of collecting directly from Amazon. Under the proposal, Amazon would agree to a $201 million judgment and assign its contractual indemnification rights against the relevant developers to a litigation trust.

Class members would agree not to enforce the judgment against Amazon itself. Instead, the trust would pursue reimbursement from developers whose apps were involved in the disputed transactions.

The proposed settlement also requires Amazon to contribute $2.5 million toward class notice and settlement administration costs. The settlement figure represents 30% of every dollar class members allegedly spent on the social casino apps during the relevant period.

Amazon Denies Wrongdoing

Amazon said it will continue to offer choice through its Appstore while requiring developers to comply with applicable laws. The company also said it may remove apps that do not meet its standards or legal requirements.

The settlement would resolve all claims against Amazon if approved by the court. However, it would not settle claims directly against the app developers, who could face reimbursement demands through the litigation trust.

The proposed structure is significant because it would allow Amazon to close the lawsuit while shifting the financial burden toward developers. Plaintiffs said the class could recover a substantial share of alleged losses if the trust succeeds in pursuing those claims.

The case is part of a broader legal challenge to social casino apps and the role of major technology platforms in distributing them. Similar lawsuits have targeted Apple, Google and Meta over allegations that they profited from social casino games or sweepstakes-style products while enabling gambling-like transactions.

Social Casino Scrutiny Continues

Social casino apps typically offer casino-style games using virtual currencies. Legal disputes have focused on whether those systems amount to unlawful gambling when users can purchase virtual chips or similar items through app stores.

Regulators, lawmakers and plaintiffs’ firms have increasingly scrutinized products that use casino mechanics while presenting themselves as entertainment rather than regulated gambling. The debate has widened as social casino and sweepstakes-style operators face pressure in several U.S. states.

The Amazon settlement does not create a final ruling that the company violated gambling law. It also remains subject to court approval, meaning the payment and trust structure is not yet final.

Even so, the proposal could become an important reference point in litigation over app-store responsibility. If approved, it would show one way a major technology platform can resolve social casino claims while directing consumers toward developers for recovery.

For the gambling industry, the case adds to the legal pressure surrounding casino-style apps that sit outside traditional licensed gaming. For technology platforms, it highlights the compliance risk tied to payment processing, revenue-sharing and distribution of apps that resemble gambling products.

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