By
Jerry Smith
Staff Writer Updated: 12/11/2023
Jerry’s greatest advantage is his extensive experience on the casino floor. His time as a casino manager taught him everything about what makes a player tick. Besides being a skilled poker player, he has deep knowledge of all live table games and gambling regulations in the US.
Amazon Faces Legal Action
It has been reported recently that corporate giant Amazon.com has been hit with a class-action lawsuit in Washington over its involvement in social casinos. These casinos form a rapidly growing yet controversial segment of online gaming these days.
The lawsuit has been filed by Nevada resident Steven Horn, and it alleges that Amazon has profited immensely from what has been deemed an ‘illegal internet gambling enterprise,’ under Washington state gambling law.
According to reports, the lawsuit’s foundation is based on a pivotal 2018 US appeals court ruling. This ruling classified social casino applications as an illegal form of betting in Washington.
Horn, the plaintiff, claims to have an addiction to online slots, and he has accused Amazon of not only offering over 30 Vegas-style social casino apps but also of processing payments for virtual chips in exchange for real money.
The Chicago-based law firm Edelson, which is known for securing substantial settlements in similar lawsuits, is representing Horn. This latest case adds to a growing list of legal challenges in Washington federal court targeting online slots and other gaming formats.
At the heart of the lawsuit is the role of Amazon as a distributor and financial beneficiary of these social casinos.
The complaint details how Amazon is deeply entwined in the business model of these apps, exerting control over their access, distribution, and promotion on its platform. It alleges that Amazon shares in a significant portion of the gamblers’ losses, which are collected and controlled by the company.
For its services, including delivering games, providing player data and insights, and handling consumer payments, Amazon reportedly earns a 30% commission on every bet, amounting to billions in revenue. The lawsuit states:
Despite knowing that social casinos are illegal, Amazon continues to maintain a 30% financial interest in the upside by brokering the slot machine games, driving customers to them, and acting as the bank. As such, Amazon is liable as a co-conspirator to an illegal gambling enterprise and conspiracy.
Social casinos, which are said to mix the excitement of gaming with social interaction, operate on a virtual currency system. These platforms, unlike regulated land-based or online casinos, are not bound by the same rules and are accused in the lawsuit of not randomizing their results.
The casinos are described as tailoring “wins” and “losses” to maximize addiction and revenue, with gameplay tweaks designed to maximize players’ financial losses. This is a practice that is alleged to be deceptive, and it is not allowed with physical slot machines.
Through this legal action, Horn seeks not only to stop Amazon’s participation in social casinos but also to get the company to return the money it has “illegally profited from” to consumers.
This lawsuit represents a significant challenge to Amazon’s role in the social casino market, bringing into question the legal and ethical responsibilities of tech giants when it comes to the facilitation of online gaming and gambling.
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