By Jonathan Stempel
(Reuters) -A federal judge on Tuesday denied Apple, Google and Meta Platforms’ requests to dismiss lawsuits claiming they promoted illegal gambling by hosting and accepting commissions from casino-style apps that addict users.
U.S. District Judge Edward Davila in San Jose, California, rejected the companies’ main argument that Section 230 of the federal Communications Decency Act, which protects online platforms from liability over third-party content, shielded them from the proposed class actions.
Davila dismissed some claims alleging violations of some U.S. state laws, but denied motions to dismiss all claims brought under consumer protection laws except in California.
Google, a unit of Alphabet, had no immediate comment. Apple and Meta did not immediately respond to requests for comment. The plaintiffs’ lawyers did not immediately respond to similar requests.
Dozens of plaintiffs contended that Apple’s App Store, Google’s Play Store and Meta’s Facebook promoted an “authentic Vegas-style experience of slot machine gambling” through an illegal racketeering conspiracy.
By exploiting users, the defendants allegedly triggered depression, suicidal thoughts and other consequences, while brokering and collecting 30% commissions – estimated at more than $2 billion – on transactions they processed, the plaintiffs added.
The lawsuits seek unspecified compensatory and triple damages, among other remedies.
JUDGE SAYS ISSUES’ IMPORTANCE JUSTIFIES IMMEDIATE APPEALS
In a 37-page decision, Davila found that Apple, Google and Meta did not act as “publishers” when processing payments, undercutting their Section 230 immunity claims.
He called it irrelevant that the companies provided “neutral tools” to support the apps, and rejected a suggestion that the plaintiffs’ failure to label them “bookies” excused them from liability.
“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.”
Davila said Apple, Google and Meta may immediately appeal his decision to the 9th U.S. Circuit Court of Appeals, in part because of the importance of the Section 230 issues.
That court dismissed earlier appeals in May 2024, saying it lacked jurisdiction at the time. The litigation against the Silicon Valley-based defendants began in 2021.
The cases in the U.S. District Court, Northern District of California, are In re Apple Inc App Store Simulated Casino-Style Games Litigation, No. 21-md-02985; In re Google Play Store Simulated Casino-Style Games Litigation, No. 21-md-03001; and In re Facebook Simulated Casino-Style Games Litigation, No. 21-02777.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)
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