Apple Hit With 25-State Gambling Apps Class Action Lawsuit

Apple is facing claims that it hosts and profits from gambling-style apps in its App Store that break gambling laws in 25 states.

In a class action lawsuit filed in the Northern District of California Tuesday, Plaintiff Kiesha Lowe took aim at Apple for hosting gambling-style games by the developer Zynga, who makes apps like Black Diamond Casino Slots, Hit it Rich! Slots and Zynga Poker. 

The lawsuit alleges that the casino-style apps violate anti-gambling laws due to their “pay to get more time” function.

When a consumer opens this type of app, they are initially given free “coins” or “chips” to play. Ultimately, the player runs out of coins or chips and is prompted to use real money to purchase additional coins or chips for the chance to continue playing, the suit states. 

“Consumers do not have the ability to collect actual cash as a result of “winning” games, but they do have the ability to win and therefore acquire more playing time. Paying money in a game for a chance to win more playing time violates the anti-gambling laws of the twenty-five states that are at issue in this case.”

Apple Accused of Profiting from Addictive Games in Class Action

Lowe says she bought coins in increments of $4.99, $9.99 and $19.99 on multiple occasions in the last three years. She says she paid more than $250 in coin purchases to Apple to continue playing Wizard of Oz slots.

The lawsuit alleges Apple is responsible because the apps could not be downloaded by consumers without Apple distributing them on its app store and allowing payment through its platform. 

In addition, Apple allegedly provided marketing guidance to help guide discovery of the Zynga apps, the class action contends, and that it contributed to development of the apps by encouraging Zynga developers to include its technology (like ApplePay). 

Apple also sold in-app purchases for the casino apps in exchange for a significant percentage of the money paid by the apps’ players.

“Apple takes a commission of up to 30% of all revenue generated by sales of Apps in its App Store and in-app purchases made on Apps obtained through the App Store,” the lawsuit states.

In 2019, people in the United States lost approximately $3.5 billion playing “free to play” apps like the Zynga casino apps, the suit states, while alleging that up to 90% of the revenue Apple earned comes from about 3% of its players who are “targeted” due to the large amounts they will spend.

“Despite the fact these Zynga casino apps do not offer an opportunity to win real money or prizes, the money spent by consumers to purchase additional coins or chips can lead to devastating consequences for those who get addicted.”

Gaming Apps Under the Microscope

Governments across the world have acted to limit the availability of micro-transaction-based games of chance like the Zynga Casino Apps due to their similarity to games of chance found in actual casinos, the class action states.

“Regrettably, such games have avoided regulation in the United States, resulting in thousands of consumers spending millions of dollars to become addicted to these unlawful games that they downloaded from the App Store, while Apple earns a substantial profit.”

Lowe is bringing the class action on behalf of herself and anyone who paid money to Apple for coins to use on the Zynga Casino Apps and live in Alabama, Arkansas, Connecticut, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, and West Virginia.

She is seeking to recover her and other members’ losses under the Civil Remedy Statutes for Recovery of Gambling Losses.

This class action is the latest in a series of suits targeting the companies hosting gaming apps on their platforms. In February, a judge ruled that Google legally can’t be held liable for the games it offers to children, even if it allegedly promotes gambling. 

In December 2020, Big Fish Casino agreed to resolve two class action lawsuits against it with a $155 million settlement deal. 

In that case, plaintiffs in the lawsuits claimed the online game platform counted as illegal gambling because, through in-app purchases, users allegedly wager real money on these games to extend gameplay, breaking Washington gambling laws.

Have you paid money to continue playing gambling apps online? Let us know what you think of the suit in the comments. 

The plaintiffs are represented by DANIEL L. WARSHAW from PEARSON, SIMON & WARSHAW, LLP and HASSAN A. ZAVAREEI from TYCKO & ZAVAREEI LLP.

The Apple Zynga Casino Apps Class Action Lawsuit is Kiesha Lowe v. Apple Inc., Case No. 5:21-cv-01144 in the U.S. District Court for the Northern District of California.

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