Amazon is facing accusations of engaging in an illicit online gambling scheme. This centers around social casino apps available for download globally, through which Amazon has reportedly earned billions of dollars.
The legal action, initiated by Nevada resident Steven Horn, targets Amazon for profiting from what he contends are illegal social casino games. These games, downloadable from Amazon, are free-to-play but involve purchasing virtual chips for continued play. Despite no real money being won, the lawsuit alleges these games mirror the addictive and profitable nature of traditional Las Vegas-style slots.
The complaint specifically points to Amazon’s complicity, arguing the company is fully aware of the illegal nature of these games yet continues to facilitate their download and use.
At the heart of this lawsuit is a demand for Amazon to cease its involvement in social casino games and return any profits deemed illegally obtained. The action names 34 social casino brands, including prominent ones like Jackpot Party, Monopoly Slots, and Big Fish Casino—the latter previously ruled illegal by a Washington court.
The lawsuit emphasizes the lucrative nature of social casinos, attributing their success to a combination of addictive gameplay and Amazon’s powerful data analytics and marketing capabilities. It argues that Amazon not only allows entry of these casinos into its store but also profits significantly from them.
According to data from Statista cited in the lawsuit, around $6.00 billion was spent on social casinos in 2020. Amazon allegedly earns a 30% commission on each wager, far surpassing the 1% to 15% range typical of traditional casinos. This suggests that Amazon could have generated approximately $1.8 billion from these games in 2020 alone.
The lawsuit describes a mutual partnership between Amazon and the social casinos, where Amazon provides distribution and collects payments in exchange for a sizeable commission. This partnership is claimed to result in consumers becoming addicted to these apps, leading to financial and non-financial damages like depression and severe financial strain.
As of now, Amazon has not released an official statement regarding the lawsuit. This case mirrors a similar situation in 2018, where International Game Technology (IGT) and its subsidiary DoubleDown Interactive faced a lawsuit for their virtual chip-based social casino products under Washington state law. In August 2022, IGT and DoubleDown settled this lawsuit for $415 million.
In other news this week, it was revealed that Amazon Games has initiated a second round of layoffs for 2023. In the second round of cutting its workforce, Amazon’s gaming department is letting go of more than 180 of its workers. It is not known whether this and the class action are related.