Tech Giants Face Federal Class Action Over Gambling Facilitation

The fleeting optimism for social/sweepstakes casino operators following the dismissal of a state-level RICO lawsuit quickly evaporated, as plaintiffs filed a fresh federal class action accusing tech giants Apple and Google of facilitating “illegal” gambling. This new lawsuit, filed last Friday in the United States District Court for New Jersey, targets Apple Inc., Apple Payments Inc., Google LLC, and Google Payment Corp. It seeks compensation for money allegedly lost to illegal gambling, as well as injunctive relief and other appropriate measures.

The plaintiffs—Julian Bargo of New Jersey, Lamar Prater of New York, and Rebecca Platt of New York—are familiar faces from the previous case, but this time, the lawsuit does not name any of the sweepstakes operators themselves as defendants. Instead, the complaint focuses solely on the tech companies, accusing them of enabling an illegal interstate gambling operation by distributing the casino apps on their platforms and processing payments related to these operations.

Allegations Against Apple and Google

The central allegation of the lawsuit is that Apple and Google knowingly facilitated illegal gambling by offering and promoting sweepstakes casino apps through their app stores. These apps, while not explicitly regulated in the U.S., have long been a subject of legal ambiguity, with many questioning their legitimacy.

The complaint argues that by hosting these apps on their platforms, the tech companies became complicit in what the plaintiffs describe as an illegal gambling enterprise. Furthermore, the lawsuit claims that both Apple and Google benefited financially from the casino apps, taking a percentage of the in-app purchases and acting as payment processors. The suit also accuses the defendants of using targeted advertising to attract users, particularly those vulnerable to gambling addiction.
Similarities to the Dismissed RICO Suit

This new class action mirrors the recently withdrawn New Jersey state-level RICO lawsuit in many respects. In that case, the plaintiffs had named several sweepstakes casino operators—such as High 5 Casino, McLuck, Wow Vegas, and CrownCoins Casino—as defendants. However, the current federal suit focuses exclusively on the tech companies, leaving the operators out of the equation.

Despite the shift in focus, the core of the argument remains the same: the plaintiffs allege that the defendants played an instrumental role in perpetuating illegal gambling by distributing the apps and enabling transactions through their platforms.

A Complex Legal Landscape

The legal status of sweepstakes casinos in the U.S. has long been murky. While the operators argue that their games fall under the legal category of “sweepstakes” rather than traditional gambling, many critics claim that these platforms are, in essence, gambling sites that bypass legal restrictions. The new lawsuit asserts that Apple and Google’s involvement in the distribution and monetization of these apps crosses the line into illegal activity, even if the casinos themselves have not been explicitly regulated or declared illegal.

The case raises significant questions about the role of tech companies in overseeing and regulating the content available on their platforms. With the proliferation of mobile apps and online services, questions about the responsibility of companies like Apple and Google to prevent illegal activities on their platforms have become more pressing than ever.

The lawsuit asserts that Apple and Google are liable for making the apps available on their phones and for processing payments to and from the casino apps.

What’s Next?

As the federal class action unfolds, the tech giants will likely face intense scrutiny over their role in facilitating the spread of these controversial casino apps. With the plaintiffs seeking both financial compensation and an injunction to prevent further distribution, the case could have wide-reaching implications for the app economy and how tech companies handle potentially illegal content.

For now, the sweepstakes casino industry finds itself caught in a legal tug-of-war, with tech companies on one side and a growing number of plaintiffs pushing for accountability on the other. While the immediate prospects for the plaintiffs remain uncertain, the tech giants are likely to mount a vigorous defense, arguing that they are merely platforms and not responsible for the content offered by third-party apps.

The outcome of this case could set a significant precedent for how the courts address the intersection of tech platforms, online gambling, and consumer protection. For now, the question remains: Will Apple and Google be held liable for facilitating what some allege to be illegal gambling, or will they escape responsibility by claiming a neutral role as app distributors and payment processors? Only time will tell.