GamblersPost Gamblers Post is a dedicated news and networking portal in the online gambling industry which features news, opinions, interviews as well as product and software reviews.
Amazon has agreed to a proposed $201.3 million settlement to resolve a class-action lawsuit accusing the company of enabling illegal gambling through social casino apps available on its App Store. The settlement, which still requires federal court approval, is intended to provide partial refunds to users who made in-app purchases in these games.
The lawsuit, filed by Steve Horn, a Nevada resident, alleged that Amazon profited from apps that allowed users to buy additional gameplay credits, which could not be won back. The proposed settlement covers an estimated 30% of the class’s total spending on these apps.
Unlike typical settlements where the defendant pays directly, Amazon will not write a check for the full amount. Instead, the company is permitting the plaintiffs’ legal team to seek reimbursement from the social casino app developers. The settlement agreement states that developers are contractually obligated to indemnify Amazon for the portion of the judgment related to spending on their apps.
“In other words, under the proposed settlement framework, Class Counsel will step into Amazon’s shoes to pursue financial recovery from the developers themselves,” the settlement documents explain. Developers are encouraged to participate voluntarily to settle their share of the judgment quickly.
Amazon has not admitted fault in the settlement. The company released a statement saying: *“This settlement will allow us to continue offering choice in our Appstore while requiring developers to make changes that improve the customer experience.”* The company also reaffirmed its right to remove any app violating applicable laws.
The case originated from a 2018 federal court ruling in Washington, where a judge determined that social gaming apps could constitute gambling when operators sell gameplay credits. The state’s definition of gambling includes risking something of value on an uncertain outcome, which the court applied to in-app purchases in these games.
Other tech companies, including Apple, Google, and Meta, face similar lawsuits, all denying any wrongdoing. The resolution of this case could influence future regulations and industry practices for social casino apps.
