Amazon invokes legal shield, seeks halt to lawsuit accusing profits from casino apps

Amazon.com has invoked a U.S. law shielding internet platforms from liabilities related to third-party content to counter a new consumer lawsuit alleging the company's profiting from illicit casino-style apps.

In a filing on Thursday, Amazon urged a federal judge in Seattle to halt the consumers' case pending an appeals court decision on similar lawsuits against Google, Apple, and Meta (Facebook), Reuters reported.

The lawsuit, filed in November, implicated Amazon in permitting free-to-play social casino apps, such as Slotomania and Double Down Vegas Slots. While these games are free initially, users can purchase additional gameplay credits. However, they cannot redeem the money spent on acquiring credits.

Plaintiff Steve Horn from Nevada claimed addiction to social gaming apps, involving over 320 financial transactions through games downloaded from the Amazon Apps & Games Store. Amazon contends that the case should be dismissed, citing Section 230 of the Communication Decency Act (CDA) of 1996, which provides immunity to internet platforms from legal claims over third-party content.

The 9th U.S. Circuit Court of Appeals in San Francisco is set to review the casino-app cases in April or May, with a decision anticipated by year-end, as indicated by Amazon's legal representatives from Perkins Coie, the report said.

The litigation, potentially involving hundreds of millions of dollars in damages, could establish new precedents regarding the scope of Section 230 of the federal Communications Decency Act of 1996, offering protection to tech companies hosting user-generated content.

In 2022, a California federal judge allowed consumers to pursue claims against Google, Apple, and Facebook over their involvement in processing payments for in-app transactions. As per the report, the law firm Edelson, leading the cases against various platforms, including Amazon, did not immediately respond to Amazon's request for a hold on the case.

Virtual casino apps, criticized for facilitating unlawful gambling, are free to play without cash prizes. Users accumulate digital chips and can purchase more to continue playing. A 2018 9th Circuit ruling declared that casino-style apps violated Washington state gambling laws.

"Because the Ninth Circuit’s resolution of the consolidated appeal will either foreclose this case entirely or substantially simplify the threshold CDA immunity issue, Amazon respectfully requests that the Court stay this action until the Ninth Circuit issues its opinion,” the company said in its petitioned. “Doing so would prevent the parties and the Court from wasting resources on a complex issue that the Ninth Circuit will soon resolve, and to the extent a dispute still remains, the Court would benefit from having the Ninth Circuit’s guidance before addressing the viability of Mr. Horn’s claims.”

Several casino games have settled consumer lawsuits, leaving the platforms to combat claims of facilitating illicit gambling enterprises. The November lawsuit against Amazon accused the company of offering over 30 illegal casino apps in a purportedly "dangerous partnership" with virtual casinos.

Amazon's filing on Thursday argued against advancing the case immediately, stating it would likely impose hardships for all parties involved. The company reserved the right to present additional arguments against the claims at a later stage.