Mike Peterson
Apple has been hit with a lawsuit claiming that it hosts, facilities, and benefits from an illegal gambling enterprise on the App Store.
The complaint, lodged in the U.S. District Court for the Northern District of California, takes aim at free-to-play social casino apps that allow users to buy in-game currency with real money.
Like real slot machines and casinos, the lawsuit alleges that social casino apps are "extraordinarily profitable and high addictive." Unlike real casinos, however, it also notes that users cannot cash out chips for real money.
While the lawsuit focuses on casino apps, it targets Apple specifically for hosting the apps — and for taking a 30% cut of in-app purchases.
"By utilizing Apple for distribution and payment processing, the social casinos entered into a mutually beneficial business partnership," the complaint says.
It goes on to claim that Apple's App Store helps distribution of the games, provides the app developers with data and insights on users, and enables processing of in-app payments. Apple, for its part, takes a cut that the plaintiffs allege is much higher than the "house" at normal casinos.
"The result (and intent) of this dangerous partnership is that consumers become addicted to social casino apps, maxing out their credit cards with purchases amounting to tens or even hundreds of thousands of dollars," the lawsuit says.
It adds that consumers spent $6 billion on virtual casino chips in 2020.
The lawsuit claims that Apple is in violation of California law, which bans slot machines. It also accuses Apple of racketeering and collection of unlawful debts.
The complaint names plaintiffs Donald Nelson and Cheree Bibbs, both of whom are social casino users who have spent "at least $15,000 each" in virtual casino currency. The lawsuit seeks class status.
Along with an order declaring Apple's alleged behavior unlawful, the lawsuit also seeks damages in the amount of the losses suffered and "disgorgement of all of Apple's ill-gotten gains," among other forms of relief.
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28 Comments
“Let’s roll the dice and see if our gambling lawsuit pays better than those apps we tried!”
I just left a comment regarding an earlier lawsuit this morning. "Try to imagine a day without someone, somewhere suing Apple"! Guess I have to double down on that. Dingos and Jackels everywhere.
This could be interesting.
You could (and some people have about games by EA and others with loot boxes) say exactly the same thing about freemium games of all types.
On the other hand, Gambling assumes there is a chance of getting money or some other price in return. You explicitly can't do that here "Unlike real casinos, however, it also notes that users cannot cash out chips for real money." The definition for "Slot Machine" also implies some sort of material reward.
I suspect it will get thrown out.
Im am quoting the App Store rules for this kind of app, below.
Apple didn't have to create any of these restrictions on gambling apps. And Apple could add more rules making them more restrictive. It's Apple's store, and they can sell whatever they want. This is not a store controlled by the public or by the government.
I would be in more in favour of adding more restrictions for gambling apps rather than removing some.
However I think the restriction on card counting apps should be removed. The reason given below is that card counters are "illegal." I don't live in the US, but I googled whether card counting is illegal, and the answer was no. https://en.wikipedia.org/wiki/Card_counting#Legal_status Wikipedia documents no country in the world where card counting is "illegal." So the Apple rules are wrong when they claim that card counting apps are "illegal gambling aids".
I find it interesting that Apple won't sell apps that help you defeat the casinos (card counting apps) but they will sell apps that let you defeat the police (police location apps). Apple supports "casinos over people" but not the "police over people."
Why not file such a suit against a wealthy company that rarely wins any suits