Amazon.com Inc. has filed a motion to stay the class action accusing it of “ongoing participation in an illegal internet gambling enterprise” based on its partnerships with social casinos.
Amazon asserts that the Communication Decency Act (CDA) shields online publishers from legal consequences for third-party content. However, with this request, the company has only asked the court for a delay until the Ninth Circuit rules on a similar case against other major tech companies.
From the filing:
Whether the CDA protects app store operators like Amazon from liability under these circumstances is at the heart of a pending Ninth Circuit consolidated appeal involving Apple, Google, and Facebook (Meta).
Amazon argues that the Ninth US Circuit Court of Appeals decision will either “foreclose this case entirely or substantially simplify the threshold CDA immunity issue.”
Considering those circumstances, the company says the stay would benefit all parties.
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. Mr. Horn would suffer no prejudice from a stay, as it makes little sense for him to expend time and energy litigating.
According to Reuters, the Ninth Circuit expects to consider the cases against Google, Apple, and Meta this spring.
Suit Equates Social Casino Partnerships to Racketeering
Last November, plaintiff Steven Horn filed the lawsuit, claiming Amazon earned billions through its distribution of social casino apps and facilitation of virtual chip sales. Those actions, the suit maintained, amount to racketeering.
Notably, Horn’s complaint rested heavily on an earlier US appeals court ruling that deemed social casinos illegal under Washington State law.
Specifically, Horn wants damages and relief under the Washington Consumer Protection Act (CPA), the Washington Return of Money Lost at Gambling Act (RMLGA), and the Racketeer Influenced and Corrupt Organizations Act (RICO).
In his original filing, lawyers argued the addictive mix of slot mechanics and the ability to exploit addictive behaviors make social casinos highly lucrative. In 2020 alone, the suit estimated consumers spent $6 billion on social casino chips.
That spending, the suit followed, adds substantially to Amazon’s bottom line.
In exchange for distributing the casino games, providing them valuable data and insight about their players, and collecting money from consumers, Amazon takes a 30-percent commission on every wager, earning billions in revenue.
By comparison, the “house” at a traditional casino only takes 1 to 15 percent while also taking on significant risk of loss in its operation. Amazon’s 30 percent take, on the other hand, is guaranteed for its ability to act as the casino “house” and broker.
Further, Horn’s lawyers claimed “tens of thousands” have been negatively affected by Amazon’s social casino partnerships.
Despite knowing that social casinos are illegal, Amazon continues to maintain a 30% financial interest in the upside by brokering the slot machine games, driving customers to them, and acting as the bank.
As such, Amazon is liable as a co-conspirator to an illegal gambling enterprise and conspiracy.
In remedy, Horn seeks restitution, damages, and relief from “Amazon’s ongoing participation in an illegal internet gambling enterprise.”
Amazon Motion Claims Stay Would Benefit All Parties
Amazon, as noted, denies any merit to Horn’s legal case.
Still, in the short term, the company argues a litigation pause will simplify things for all involved.
Allowing the Ninth Circuit to first address the scope of Section 230 immunity—in an appeal involving the same core facts alleged here—will simplify the issues for the Court and the parties and could completely resolve this action. Indeed, regardless of what the Circuit decides, the parties and the Court will have “the benefit of the Ninth Circuit’s analysis,” allowing the parties to streamline their initial briefing and informing this Court’s evaluation of Section 230 immunity.
Amazon concludes:
Ultimately, though, a stay will benefit everyone—including Mr. Horn—by avoiding “unnecessary briefing and premature expenditures of time, attorney’s fees, and resources” until the Court and the parties know the scope of Section 230 immunity in this context.
For those reasons, Amazon respectfully requests that the Court stay this action until the Ninth Circuit resolves the appeal of In re Apple.
Amazon did not respond to Bonus’ request for comment.
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