Apple, Social Casino Apps, And An Illegal Partnership: Minting Billions?

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Getting sued is a frequent affair for Apple Inc. (NASDAQ:AAPL) and therefore it is no surprise when a new lawsuit against the iPhone maker surfaces. But, that being said, the latest complaint against the iPhone maker is quite unique.

Yesterday, a new lawsuit was filed against the Cupertino-based tech giant in the United States District Court for the Northern District of California. The complaint alleges that Apple has been profiteering and making money by allowing illegal gambling apps on its App Store!

Now, the interesting part here is that the plaintiffs – Donald Nelson and Cheree Bibbs both spent close to $15,000 each in virtual casino currency. They both were avid social casino users and by filing the lawsuit, they wish Apple’s actions to allow social casino apps on its App Store to be ruled unlawful.

What more? Besides wanting the court to order the iPhone-maker to give up its “ill-gotten gains”, they also expect damages to match the figure of their own personal losses.

The suit (which you can read about in detail over here) is focused on freemium casino apps with in-app purchases listed on Apple App Store that allow users or players to buy in-game currency with real money.

Often termed as ‘social casino’ apps, these games allow Apple device owners to experience Vegas-themed gambling using virtual slot machines. But, unlike the real world, chips won in these app-based games can only be used by players to continue playing on the same virtual slot machines.

Lawsuit: Apple & Casino Apps In Illegal Mutually Beneficial Partnership

The lawsuit filed against Apple alleges that the social casinos have entered into a mutually beneficial business partnership with the iPhone-maker. Apple lets casino apps utilize their distributing and payment processing capability, i.e the App Store in exchange for a cut of the house wins.

The complaint points out that the developers of the casino games leverage Apple’s App Store to distribute their apps, get data and info about the users, and process in-app payments. Thus, in return, Apple supposedly gets a slice that is higher than what a typical house earns in a real-world casino.

The plaintiffs also stated that the result and direct intent of this illegal and dangerous partnership boil down to affecting the end-consumers who are becoming addicted to the social casino apps. Many of players or users of these casino gaming apps are maxing out their credit card limits with purchases that can amount to tens and in some cases even hundreds of thousands of dollars.

According to the lawsuit filing, a whopping $6 billion was spent by consumers on virtual casino chips in the previous year. The lawsuit seeks a class-action status adding that Apple is in violation of the California law which happens to ban slot machines apart from stressing on the allegation that accuses Apple of racketeering and collection of unlawful debts.

It now remains to be seen how Apple responds to this rather unique lawsuit thrown at them. All in all, one must take note of the fact that the U.S. California law bans physical slot machines and nowhere does it mention virtual games that mimic the same experience are also illegal and should be banned.

Thus, while the lawsuit might fail on those grounds, it will be interesting to know what is of the outcome of it all. We will keep you updated on all future developments. Until then, stay tuned.


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