Judge Orders Tech Giants Apple, Google and Meta to Court over Illegal Gambling Claims
A federal judge has ordered Apple, Google and Meta to face lawsuits alleging they profited from illegal gambling apps offered on their platforms.
LISTEN TO THIS ARTICLE:On Tuesday, according to a Reuters report, US District Judge Edward Davila in San Jose, California, rejected the companies’ motions to dismiss lawsuits that claim they promoted and profited from casino-style mobile applications. The lawsuits argue that the tech giants hosted apps designed to mimic slot machine gambling, encouraged user engagement, and collected significant commissions from in-app purchases.
Related: Tech Giants Face Sweepstake Casino LawsuitThe defendants argued that Section 230 of the Communications Decency Act protected them from liability because it shields online platforms from legal responsibility for third-party content. Judge Davila, however, found that this defense did not apply to the claims regarding payment processing and financial transactions tied to the casino apps. He stated that Apple, Google and Meta were not acting as publishers when they processed payments, and therefore their reliance on Section 230 immunity was not valid.
While some claims were dismissed, particularly those based on violations of specific state laws, Davila allowed most consumer protection law claims to proceed, with the exception of those filed under California statutes. The decision means that the companies will continue to face significant litigation that could impact how they handle app-based transactions in the future.
Apple, Google and Meta were accused by dozens of plaintiffs of conspiring to promote apps that offered what they described as authentic Vegas-style slot machine gambling experiences. The lawsuits, first filed in 2021, allege that the companies facilitated transactions, took commissions of about 30% on user spending, and earned more than $2 billion collectively from the arrangement.
According to the plaintiffs, these practices encouraged addictive behavior, leading some users to experience depression, suicidal thoughts and other harmful consequences.
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The complaints also contend that the companies created a system in which they not only distributed the apps but also profited directly from user spending on virtual casino chips and credits. This, the plaintiffs claim, made them active participants in an illegal gambling scheme rather than neutral intermediaries.
In his 37-page ruling, Judge Davila explained that it was irrelevant whether the companies described their tools as neutral or whether the plaintiffs did not label them as traditional bookmakers. The central issue, he noted, was that the companies allegedly processed payments for social casino apps in a way that violated consumer protection laws. This finding undercut the platforms’ primary defense and paved the way for the cases to move forward.
The lawsuits seek compensatory damages and potentially triple damages under racketeering and consumer protection statutes. While the precise financial exposure remains uncertain, the litigation could have significant implications given the billions of dollars allegedly generated by the transactions.
Apple, Google and Meta now have the option to appeal the decision immediately to the 9th US Circuit Court of Appeals. Judge Davila acknowledged the importance of the Section 230 issues at stake and allowed the possibility of direct appellate review. The 9th Circuit had dismissed earlier appeals in May 2024, citing a lack of jurisdiction at the time.
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