Google, Apple and Facebook lawsuits unified in “illegal gambling conspiracy” lawsuit

Google, Apple and Facebook have been implicated in an alleged “illegal gambling conspiracy” class action lawsuit in the state of California concerning so-called social casino games.

In documents filed at the US District Court for the Northern District of California, Golden State officials unified three separate complaints into one consolidated lawsuit involving 25 separate plaintiffs, establishing a leadership hierarchy of complaints to be considered.

The lawsuit centres on social casino gaming – free-to-play gambling-like games – which is currently illegal in the state of California. It implicates the trio in a “social casino enterprise” designed to funnel players in the state to social casino slots games provided by a number of firms including DoubleDown Interactive.

Class action lawsuits will be tried under 20 different state laws and in some cases at a national level.

The suit cites legal precedent in a 2018 case between Washington State and social casino provider Big Fish Games in which the Ninth Circuit of US Court of Appeals said virtual coins were “something of value” under Washington State law and, therefore, conceptually equivalent to money.

Detailing numerous instances of plaintiffs incurring financial losses arising from the alleged illegal gambling, the combined class action suit is filed under RICO laws. It suggests activities carried out by the group “affect interstate commerce” and have damaged interstate commercial activity.

“This ongoing enterprise necessarily promotes the success of each of its members: social casino operators need platforms like Facebook, Apple and Google, to access consumers, host their games and process payments,” the suit explains.

“The platforms, for their part, need developers like DoubleDown to publish profit-driven and addictive applications on their platforms to generate massive revenue streams,” it adds.

In respect of Facebook, the suit alleges that the social media firm “holds a major (30%) financial interest by hosting the game, driving customers to it and acting as the bank,” while it also serves as chief promoter for the illegal gambling.

“As an instructive example, DoubleDown Casino is illegal both in Washington and here in California (where the platforms, including Facebook, host it and collect their 30% commission),” the suit explains.

“This year, consumers will purchase approximately $400m worth of virtual casino chips in DoubleDown Casino.

“That $400m will be divided up approximately as follows: $240m to DoubleDown; $40m to IGT and – as particularly relevant here – the remaining $120m to Facebook and the other platforms (for hosting the app, driving vulnerable consumers to it and processing the payments for those consumers’ virtual chip purchases),” it adds.

The suit even suggests the social casino enterprise amounts to “racketeering” under US law.

“Most or all of the illegal slots are also hosted and promoted by the other platform members of the social casino enterprise: Apple and Google,” the suit continues.

“Millions of consumers access illegal slots through Facebook, and at least thousands have paid money to Facebook to purchase virtual chips for gambling on the illegal slots.

“These players have been injured by Facebook’s conduct because they have lost money as a result of Facebook’s hosting, promoting and facilitating of illegal gambling and Facebook’s participation in unfair and unscrupulous business practices,” it adds.

The case continues.