Apple, Google Casino App Case Heading to Ninth Circuit

Posted on: September 8, 2022, 06:45h. 

Last updated on: September 8, 2022, 07:30h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Cases against three technology titans in which plaintiffs claim the companies provide platforms to illegal gaming are heading to the 9^th US Circuit Court of Appeals. That’s after a federal judge in a lower court asked for clarity on unfamiliar precedent.

The cases involve Google parent Alphabet, Apple, and Facebook owner Meta Platforms. US District Judge Edward Davila of San Jose recently issued a consolidated decision on the matter, dismissing two of plaintiffs’ three claims.

Davila ruled the three technology companies are protected from allegations they offered casino apps to customers and then provided related data to developers. That alleged action would be in an effort to help game purveyors extract more money from bettors. Davila cited Section 230 of the Communications Decency Act.

However, Davila also ruled that Section 230 doesn’t provide immunity to claims that the companies processed and received payments from customers used to acquire digital chips in the gaming apps.

This case involves controlling questions of law, namely whether the platforms are entitled to immunity for their hosting of the allegedly unlawful social casino apps,” Davila wrote in his decision. “While the court believes it has followed the 9th Circuit’s precedent on this complicated question, the court finds that reasonable minds could differ as to the outcome.”

Appointed by former President Obama, Davila admits he could be misinterpreting the scope of Section 230, and as such, he’s asking 9^th US Circuit Court of Appeals to review the ruling.

Long-Running Gaming-Related Suits Against Big Tech

Last year, plaintiffs Donald Nelson and Cheree Bibbs sued Apple in the US District Court for the Northern District of California. They claimed they each spent more than $15,000 on in-app purchases on casino-style games they downloaded from Apple’s App Store.

“The result (and intent) of this dangerous partnership is that consumers become addicted to social casino apps, maxing out their credit cards with purchases amounting to tens or even hundreds of thousands of dollars,” according to the Bibbs/Nelson suit.

As for the consolidated case against Alphabet, Apple and Meta, the involved parties must request that the 9^th Circuit take on a review of Davila’s ruling. It’s likely the higher court will oblige on the basis that the district court judge certified the ruling.

The case features at least 25 plaintiffs. Should the 9^th Circuit decline to advance the litigation, Davila’s ruling holds. That means Alphabet, Apple, and Meta will be held liable for processing payments for useless virtual gaming chips.

Separately, California-based Meta announced earlier today it’s doing away with its Responsible Innovation team — a group formed to deal with potential downsides of the company’s various products. The Wall Street Journal reports the social media giant could maintain the mission of that group while directing resources to other teams.

Implications for Other Companies

Alphabet, Apple and Meta are the most recognizable names in the aforementioned litigation. Other companies, including dedicated gaming firms, could be affected by the ruling.

For example, there are the companies that develop the apps, some of which are publicly traded. On a related note, some slot machine manufacturers license intellectual property to the app purveyors.

It’s possible those firms will be affected if courts take a hard stance on the line between in-app purchases and real money gaming.