A class-action lawsuit has been filed against Amazon, accusing the online retail giant of profiting from free-to-play social casino games. The lawsuit claims that these games, although they do not offer real-money prizes, are highly addictive and extraordinarily profitable.
The lawsuit alleges that Amazon is aware of the controversial nature of these social casino games but still allows them to be downloaded. The plaintiffs are demanding that Amazon cease offering these games and return any money that has been illegally gained to consumers.
The complaint specifically names 34 social casino brands, including Big Fish Casino, Jackpot Party, Monopoly Slots, Lotsa Slots, Black Diamond Casino, and Quick Hit Slots. It estimates that a staggering $6 billion was bet on social casinos in 2020, with Amazon taking a 30% cut of each wager.
According to the lawsuit, social casinos are highly lucrative because they combine the addictive elements of traditional slot machines with Amazon's ability to leverage big data and social network pressures to identify and target consumers prone to addictive behaviors. The plaintiffs argue that the social casino apps cannot operate and profit at such a high level without Amazon's involvement.
The lawsuit claims that Amazon not only allows social casinos into its store and promotes their distribution but also directly shares in a substantial portion of the gamblers' losses, which are collected and controlled by Amazon. By utilizing Amazon for distribution and payment, the social casinos have entered into a mutually beneficial business partnership, with Amazon earning billions in revenue through a 30% commission on every wager.
The lawsuit highlights the harmful consequences of social casino addiction, including financial damages such as maxing out credit cards with purchases amounting to tens or even hundreds of thousands of dollars. It also mentions non-financial damages, such as depression, divorce, and even attempted suicide.
The legal status of social casinos varies by state and is not always clear. In a previous lawsuit against International Game Technology (IGT) and its subsidiary DoubleDown Interactive, the court ruled that virtual chips in social casino products have value and can be considered gambling. The defendants settled for $415 million.
Amazon is not the only tech giant facing scrutiny over the promotion of gaming products. Google, too, has faced investigation, although it managed to avoid a fine in Italy related to gambling-related content.
The class-action lawsuit against Amazon raises concerns about the company's involvement in the highly profitable social casino industry. The plaintiffs argue that Amazon's role in distributing and profiting from these addictive games contributes to consumer harm. The outcome of this lawsuit could have significant implications for the regulation of social casinos and the responsibilities of tech giants in promoting such products.
