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Apple Sued for Hosting 'Illegal' Social Casino Apps

News

2021-03-16

Filing a lawsuit against Apple is not uncommon these days. Almost every attorney in the US has the contacts of Apple's General Counsel, Katherine Adams. That aside, a brand new lawsuit has been filed in California. This time, the complainant alleges that Apple is minting money from illegal gambling practices. But is it true?

Apple Sued for Hosting 'Illegal' Social Casino Apps

Distribution of free slot machines

The suit mainly focuses on free-to-play casino apps, which let players purchase in-game currency with real cash. These "social casino apps" allow mobile casino punters experience Vegas-style thrills via virtual slot machines. But in this case, chips won are not converted to real money. Instead, gamers use them to continue playing.

Now here's what the lawsuit is about. While gamers can't win real cash, Apple still gets its 30% cut from in-app purchases, including the casino chips. According to the complainant, using Apple as a payment processing means, the casinos and the firm have a mutually beneficial partnership. It's a known fact that Apple distributes these apps through its App Store.

The two plaintiffs (Cheree Bibbs and Donald Nelson) say that gamers spent at least $6 billion purchasing chips on social slot machines last year alone. Together, the two of them spent at least $30,000 on the chips.

Therefore, they are asking if Apple is earning more from betting than the casinos themselves. They say that the house takes home around 15%, almost half of Apple's share. Additionally, it's the casinos who risk losses when punters make huge profits.

Dangerous data sharing

The plaintiffs also allege that Apple shares analytics data with game developers. This data is used to identify players with addictive behaviors and how to address the problem. They continue that the information can come in hand when curating the social casinos' content to target high-spending players and encourage them to play even more.

With this lawsuit, Cheree and Donald hope that Northern California's district court will rule that Apple is acting unlawfully. They are seeking compensation for their losses and prevent Apple from distributing such apps. What's worse, the lawsuit wants Apple to surrender its "ill-gotten profits." It's important to remember that some of these gambling apps are even illegal in California state.

A threat to California's gaming industry

Over the past couple of years, social casinos have battled numerous lawsuits alleging illegal gambling. However, most of these cases weren't successful. But that was until March 2018 when a federal court ruled that Seattle-based Big Fish Casino had broken betting laws in the state of Washington, which is its home state.

As a result, Big Fish had to part with a whopping $155 million in compensation. The money was used to recover all payments made by punters who played the casino's social games. Churchill Downs, the Big Fish owner ($124 million), and Aristocrat Technologies ($31million) shared the consequence. Although Churchill Downs had already sold the company to Aristocrat Technologies for nearly $1 billion, both were listed as defendants.

Other Apple App Store battles

As said before, Apple is no stranger to lawsuits. Only recently, German-based app developer, Mueller, filed a complaint with the EU and the US Department of Justice after Apple placed a blanket ban on Covid-19 apps. His app, named Corona Control Game, was among the banned apps due to its Covid-19 theme.

Still in 2020, the company was sued for monopolizing app distribution on its operating system. The lawsuit filed in California federal court claims that the company "squashed all competition" on App Store, making it challenging for clients to obtain iOS apps. It will undoubtedly be interesting to see how all these cases end up.

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