30 May, 2024


Apple slapped with class action suit over gambling apps

Tech giant Apple is facing a class action suit brought by a number of US States, who argue that their gambling laws have been violated.

The US $5 million suit was filed with US District Court for Columbia on behalf of the 25 States which include Alabama, Georgia, Illinois, Massachusetts, New Jersey, and Washington.

Apple is accused of hosting and profiting from casino-style apps, specifically those developed by Zynga, a leading provider of free mobile and social games.

At issue is the way that what are ostensibly free games use in-app purchases in order for players to progress. The lawsuit argues that a fraud is essentially being perpetrated – as there are no real money prizes, the apps have been considered legal up to this point. However, the use of in-app purchases effectively changes their nature.

The plaintiffs refer to games like blackjack, roulette, poker, and keno, where users are given a limited number of chips to start. However, once their stake has been exhausted, then gamers are encouraged to use real money to buy additional coins or chips.

One of the major points of principle at stake is that players are unable to collect real cash from these casino games, but earn their reward for winning in the form of more playing time.

Apple’s alleged culpability comes from them providing IOS development tools to Zynga, hosting the titles on their App store, and, thereby, gaining revenue from both in the form of commission.

They are also accused of permitting and facilitating illegal gambling by allowing what is tantamount to an unlicensed casino to operate on their platform.

The plaintiffs are seeking an injunction on such games being hosted on the Apple platform and through its app store, as well as damages, restitution ,and legal fees.

This is not the first such legal action initiated against Apple in relation to such apps – last October, a lawsuit was filed in Connecticut alleging that the company violated gambling laws by hosting such apps. Another suit that was filed in January has highlighted the addictive nature of casino games.

In a sense this is opposite to the types of bonuses like free slots in South Africa offered by some operators such as listed here, where new players can obtain initial starting bonuses. However, the aim is the same – to try and encourage gamblers to play and spend more.

Industry insiders have noted though that this type of lawsuit would probably not succeed anywhere else in the world. For example, in Europe, there is widespread acceptance that social casino games are played for free, which, by extension, means that there are no cash outs available either.

In social casinos players receive a set amount of rounds per hour or day, and, once they have used their quota, players normally have to wait to play again.  However, gamblers can effectively jump the queue by buying extra credits.

This is an accepted business model, and not one where most European consumers would feel that that is any deception involved.

Apple have not commented publicly on the lawsuit but they are likely to contest the charges vigorously.

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