Amazon has reached a tentative agreement to settle a class-action lawsuit in the United States for $201 million. The lawsuit accused the company of enabling unlawful gambling transactions via social casino apps found in its Amazon Appstore.
This proposed settlement is pending approval from the U.S. District Court for the Western District of Washington. If approved, it will resolve all claims against Amazon, allowing consumers to seek refunds from the developers of social casino games instead of the e-commerce giant.
The lawsuit, initiated in November 2023 by Steven Horn from Nevada, claimed that Amazon breached Washington's Consumer Protection Act and state gambling regulations by serving as the sole payment processor for in-app purchases of virtual casino chips in social casino applications. It was also alleged that Amazon earned a 30% commission on these transactions.
While Amazon has denied any misconduct, it has opted to settle the allegations.
According to the proposed settlement, class members will not directly execute the $201 million judgment against Amazon. Instead, a litigation trust will be established, allowing consumers to seek reimbursement from 32 social casino game developers under Amazon's contractual indemnification rights.
The settlement amount represents 30% of the total spent by class members on social casino applications during the specified timeframe. Additionally, Amazon will contribute $2.5 million to cover initial expenses related to class notifications and settlement administration.
In their motion for preliminary approval, the plaintiffs stated: "The class is set to recover a significant portion of their total losses, aligning with settlements reached against the social casino developers."
The court documents further noted: "This framework allows the class to recover a substantial percentage of their damages directly from the developers, consistent with previous settlements with those developers."
Amazon has indicated that developers must enhance the customer experience and ensure their applications adhere to relevant laws. The company has warned that it will not hesitate to remove any applications that do not comply with these standards.
This settlement arrives at a time when social casino and sweepstakes gaming operators are under heightened scrutiny in the U.S., with regulators and lawmakers contending that these products exploit virtual currencies to bypass gambling laws.
Additionally, there are ongoing lawsuits against Apple, Google, and Meta related to social casino and sweepstakes gaming platforms, including claims filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act.