Apple, Google Face Lawsuit Over Social CasinosCompanies, Operators Alleged To Be Violating RICO Act |
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Apple and Google have been named in a New Jersey class-action lawsuit alleging that the two companies have violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by allowing users to download sweepstakes and social casinos.
The lawsuit also named some of the casino operators as well. Plaintiff Julian Bargo says he lost $1,000 on the platforms and alleges that the companies engaged in fraud and misconduct.
“The (casino game operators) misleadingly describe themselves as ‘social casinos’ to promote the deception that their websites and apps are free to play purely for entertainment purposes only,” the lawsuit says.
Details On The Lawsuit
The casinos make use of virtual currency and also allow users to purchase additional coins. Gaming companies have argued that players know there is no expectation of winning real money. The companies also note that users can play without purchasing anything and the platforms are meant to be a social gaming experience rather than traditional casino gaming.
The lawsuit alleges Apple and Google “shepherd unwitting customers” to the casino platforms. In August, the American Gaming Association (AGA) called for investigating social casinos, arguing that they violate gaming laws.
“Sweepstakes casinos claim that because they don’t require real money for their gameplay, they are not offering gambling under the letter of the law,” the casino industry trade group noted. “However, functionally, sweepstakes casinos look and play like an online casino while using a dual-currency system to avoid licensing and regulation.”
The Michigan Gaming Control Board has been particularly active in going after social gaming operators. In October, the regulator sent cease and desist orders to Papaya Gaming, Ace23, and Ace Per Head. The state views social and sweepstakes operators as unregulated gambling.
“The Michigan Gaming Control Board firmly believes in a regulated and safe gaming environment,” MGCB executive director Henry Williams said. “Illegal gambling is not tolerated in Michigan, and we will take all necessary actions to protect our residents from such unlawful practices.”
The suit against Google and Apple comes after Amazon faced a similar suit last year. Attorneys for the company, however, pointed to Section 230 of the federal Communications Decency Act of 1996.
The Department of Justice has noted that this provision “provides immunity to online platforms from civil liability based on third-party content and for the removal of content in certain circumstances. Congress originally enacted the statute to nurture a nascent industry while also incentivizing online platforms to remove content harmful to children.”
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