October 29, 2020 – Lawsuits Say Gambling Games Violate New York, New Mexico Laws
Apple and Google have been hit with additional proposed class action lawsuits that respectively allege the casino-style gaming apps available through the App Store and Play Store violate New York and New Mexico gambling laws.
The complaints, found here, here and here, allege Apple and Google have violated state gambling laws by making available through their respective app stores casino-style games in which players pay money for a chance to “win” more playing time. Although the tech giants have the ability to geo-restrict casino-style games to states in which gambling is allowed, they have chosen not to do so given how much money the apps pull in, the lawsuits allege.
October 23, 2020 – Google, Apple Each Hit with Another Gambling-Game Lawsuit, This Time in Georgia
Shortly after the publication of this blog post, Apple and Google were each hit with at least one more proposed class action alleging they’ve facilitated illegal gambling in a southern state by offering casino-style games of chance in their respective app stores.
The lawsuits, found here and here, allege Apple and Google have violated Georgia law by selling casino-style games of chance, replete with in-app purchases, wherein players can “win” to acquire not actual cash, but more playing time.
“Georgia’s gambling statutes and the case law interpreting them make it clear that paying money in a game for a chance to win more playing time constitutes illegal gambling,” the lawsuits charge.
The cases, similar to the proposed class action detailed on this page, say that although Apple and Google have the ability to geo-restrict games of chance to limit their play to the states in which gambling is allowed, the companies choose not to do so given the apps’ promise to bring in revenue.
Separate proposed class action lawsuits allege Apple and Google have promoted, enabled and profited from illegal gambling in Alabama by way of offering hundreds of mobile casino-style games of chance through their respective app stores.
The cases, filed on October 21 in Alabama federal court, claim the tech giants have run afoul of state law in that the slot, blackjack, roulette, poker, keno, bingo and card games offered through Apple’s App Store and Google’s Play Store are no different than real-world games of chance in which a player wagers—and can lose—real money.
Even though mobile users can’t win actual cash, the fact that they can win more playing time is what makes the casino-style games made available by Apple and Google illegal in Alabama, the lawsuits argue:
A customer such as plaintiff does not have the ability to collect actual cash as a result of ‘winning’ games, but he does have the ability to ‘win’ and thereby score more playing time. Alabama’s gambling statutes make clear that paying money in a game for a chance to win more playing time constitutes illegal gambling under Alabama law.”
The lawsuits’ filings come on the heels of the United States Justice Department levying a landmark antitrust action against Google over what the government claims is the company’s unlawfully monopolistic position as the effective “gatekeeper” to the internet, particularly when it comes to search and online advertising. Predictions have naturally begun to swirl that Apple may soon enough come to find itself under a similarly crushing weight, in particular as it relates to the 30-percent “Apple tax” the company takes for app downloads and in-app purchases.
Win, lose or . . . pay more to keep losing?
Apple and Google each allow users to buy apps that the lawsuits describe as “no more or no less” than typical casino-style games, such as table games and slot machines. Per the suits, there is little variation in how these games work given they’re free to download, offer a user a set quantity of free “coins” (or some other currency) to start, and operate “precisely like a casino slot machine or other games in Las Vegas.”
When a player loses, they lose their “coins” yet have the chance to win back what they’ve lost, the cases state. Should a player run out of coins, they’re prompted to use real money to buy more in order to continue playing the game, the lawsuits read.
According to the complaints, however, players do not have the ability to collect any cash if they’re able to “win” in a mobile gambling game in Alabama. What they’re able to “win” instead is only more playing time.
The lawsuits stress that regardless of whether a player can hit it big on cash or more playing time, they’re still spending money for a chance to win something of value.
‘[S]omething of value’ is not limited under Alabama law to the situation where one gambles in the hopes of winning actual cash money. Rather, ‘something of value’ specifically includes ‘extension of a service entertainment or a privilege of playing at a game or scheme without charge.’ As a matter of law, paying money to get ‘coins’ one bets hoping to win more ‘coins’ so as to gain the ‘privilege of playing at a game or scheme without charge’ is gambling a thing of value under Alabama law.”
The lawsuits allege plainly that a game, including any of the top 200 found in the App Store and Play Store, wherein a patron pays money for the chance to win more free playing time violates state law.
Apple and Google far from bystanders, lawsuits say
Each case respectively characterizes Apple and Google as “not some minor or incidental participant” in the gambling games they offer in their app stores, arguing the companies serve as “the principal promoter[s] and facilitator[s] of the illegal activity.” According to the lawsuits, Apple and Google wield “dictatorial control” over not only which apps can be downloaded from the App Store and Play Store but over the payment method used to buy items within a particular app.
Both suits quote a passage from Fortnite maker Epic Games’ antitrust lawsuits against Apple and Google in which the developer accuses the companies of weaponizing contractual agreements, technological barriers and unreasonable restraints on app makers in order to block potential competitors from the app market:
Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content.”
Google has eliminated competition in the distribution of Android apps using myriad contractual and technical barriers. Google’s actions force app developers and consumers [into] Google’s own monopolized ‘app store’—the Google Play Store. Google has thus installed itself as an unavoidable middleman for app developers who wish to reach Android users and vice versa. Google uses this monopoly power to impose a tax that siphons monopoly profits for itself every time an app developer transacts with a consumer for the sale of an app or in-app content.”
The lawsuits reiterate that Apple and Google take a 30-percent cut of not only each app purchase but of all purchases made within an app, including transactions to buy more “coins” to continue gameplay.
Can’t or won’t? Companies can, but don’t, geo-restrict gambling in Alabama, suit relays
The lawsuits round out by stating Google and Apple have the ability, as they’ve employed for other apps, to geo-restrict games in order to prevent them from being played in states in which gambling is illegal. Although the companies have done just that for cash-out gambling games, restricting the play of such to states in which gambling can be done legally, and for games minors are kept from downloading or playing, Apple and Google have simply chosen not to do so in Alabama given the revenue they bring in, according to the complaints.
Both lawsuits, each of which lists the respective top 200 gambling game apps in the App and Play Stores, can be found below.
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