Amazon has proposed a $201 million settlement in a U.S. class-action lawsuit claiming it enabled unlawful gambling activities via social casino applications accessible through its Amazon Appstore.
This proposed settlement, pending approval from the U.S. District Court for the Western District of Washington, aims to settle all allegations against Amazon while allowing consumers to retrieve funds from social casino game developers, rather than from the e-commerce giant itself.
The lawsuit, initiated in November 2023 by Steven Horn from Nevada, accused Amazon of breaching Washington’s Consumer Protection Act and state gambling regulations by serving as the sole payment processor for in-app purchases of virtual casino chips within social casino apps distributed via the Amazon Appstore. It was also claimed that Amazon took a 30% cut of these transactions.
While Amazon has denied any wrongdoing, the company has opted to settle the claims.
Under the terms of the proposed settlement, class members will not initiate the $201 million judgement against Amazon. Instead, a litigation trust will be created enabling consumers to reclaim funds from 32 social casino game developers using Amazon’s contractual indemnification rights.
This proposed judgement encompasses 30% of every dollar class members invested in social casino applications during the specified timeframe. Additionally, Amazon will contribute $2.5 million to address initial expenses related to class notifications and the administration of the settlement.
In a motion requesting preliminary approval for the settlement, the plaintiffs stated: “The class is positioned to recover a significant portion of their total expenditures that is consistent with the settlements secured against the social casino developers.”
The court filing further noted: “This structure allows the class to recover from the developers a substantial percentage of the class’s damages, aligning with previous settlements with developers.”
Amazon has indicated that developers will be mandated to “enhance the customer experience” and ensure their applications comply with relevant laws. The company stated that it would be compelled to remove applications failing to meet these standards.
This settlement arises amid heightened scrutiny of social casino and sweepstakes gaming providers across the United States, with regulators and lawmakers arguing that such offerings utilize virtual currencies to bypass gambling regulations.
Separate legal disputes concerning social casino and sweepstakes gaming platforms are ongoing against Apple, Google, and Meta, including claims lodged under the Racketeer Influenced and Corrupt Organizations (RICO) Act.