Apple Conspiring With ‘Social Casinos’ to Violate Rico Act, Alleges Lawsuit
Apple “hosts and facilitates” at least 50 “social casinos” on the App Store that prey on addicted gamblers in an orchestrated “conspiracy” to reap profits at twice the rate of traditional Las Vegas casinos, alleged two self-described gaming addicts in…
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a complaint (in Pacer) Friday in U.S. District Court in San Jose. Apple’s practices violate protections against illegal gambling in the 1970 Racketeer Influenced and Corrupt Organizations (Rico) Act, said the complaint, seeking class-action status on behalf of other recovering compulsive gamblers. Social casinos sell gamblers monetary credits they redeem for spins on virtual slot machines but don’t let them cash out as they can in a Las Vegas house, said the suit. Credits they win can be used only for additional spins on the slots, it said. Apple and the social casinos collaborate in a “mutually beneficial business partnership,” it said. In exchange for distributing the social casinos, feeding them “valuable data” about their players and collecting their money, Apple earns a 30% commission on every wager, it said. The traditional casino takes in 15% at most on every bet, it said. Apple is using its developer tools to “take advantage of users with severe gambling problems,” said the complaint. “Apple has unlawfully made billions of dollars on the backs of consumers.” It breached the Rico Act by engaging in a “pattern of racketeering activity,” including by marketing and selling “rigged and manipulated” slot games that are illegal in many states and “disguising them as innocuous video game entertainment,” it said. Apple also is injuring consumers by continuously “soliciting” the public “to play illegal slot machines,” it said. The suit seeks restitution of all gambling losses for the proposed class of consumers, plus punitive and statutory damages. Apple didn’t comment Monday.