Three of the world’s largest tech companies — Apple, Google, and Meta — will have to continue fighting a lawsuit that accuses them of profiting from illegal gambling-style apps. U.S. District Judge Edward Davila in San Jose rejected their bid to dismiss the claims, ruling that Section 230 of the Communications Decency Act does not shield the companies when it comes to processing payments for apps that allegedly simulate real-money gambling.
The decision means that dozens of plaintiffs, who say they suffered addiction and financial harm through social casino apps, can move forward with parts of their case against the tech giants.
Section 230 at the Center
Apple, Google, and Meta had argued that they should be protected under Section 230, the law that shields platforms from liability for third-party content. Judge Davila, however, noted a key distinction: while Section 230 covers distribution of apps, it does not exempt companies when they actively facilitate and profit from payments tied to allegedly illegal gambling.
“The crux of plaintiffs’ theory is that defendants improperly processed payments for social casino apps,” Davila wrote. “It is beside the point whether that activity turns defendants into bookies or brokers.”
That interpretation leaves the companies exposed to consumer protection claims, even though Davila did toss some state law violations and racketeering allegations.
Billions at Stake
At issue are “Vegas-style” slot and casino apps promoted on the App Store, Google Play, and Facebook. The plaintiffs argue the companies act like “bookies,” collecting estimated 30% commissions worth over $2 billion. They also claim these platforms fueled addiction, depression, and even suicidal behavior among players.
Judge Davila wasn’t convinced the defendants should be labeled bookies, but allowed claims tied to payment processing and consumer protection to continue.
The lawsuits seek unspecified damages, potentially tripled under federal law, as well as injunctive relief to prevent further distribution of the apps.
Appeal Likely
Apple, Google, and Meta can now appeal the ruling to the Ninth U.S. Circuit Court of Appeals, which has jurisdiction over Silicon Valley. The Ninth Circuit has often sided with tech firms in high-profile cases, making the next phase of litigation critical.
For now, the ruling is a major setback for the companies, keeping alive a case that could have sweeping implications for the booming social casino market — an industry that has long existed in a gray zone between gaming and gambling law.
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