Last Friday, consumers who took Apple, Facebook and Google to court for their role in the allegedly illegal “social casino business” earning them billions from online casino token sales transactions said that companies could not invoke a Communications Decency Act under Section 230. (CDA) defense. They opposed the dismissal, arguing that the provision does not extend to defendants who facilitate illegal transactions for a fee, even when those transactions stem from third-party content.
The consolidated lawsuit filed against the three companies in November 2021 alleges that online platforms support an illegal gambling empire at the expense of consumers. What is special about these types of games, “social casinos”, is the ability of players to buy more playing time or chances with fiat currency, but their inability to earn anything other than more playing chances.
According to the filing, social casinos are illegal under some states’ gambling laws. It details how some consumers, attracted to games because of their addictive nature, have lost thousands of dollars, while enriching game makers and companies that facilitate in-app purchases and in-app purchases through the App. Apple Store, Facebook Center app and Google Play Store.
Last month, the companies sought dismissal under Section 230 of the CDA in separately filed petitions. For its part, Facebook argued that it, an interactive computing service, is the “publisher or speaker” of content created entirely by third parties. Facebook also cited an early 2022 ruling from the same district dismissing a gambling-related lawsuit against Google based on Section 230 immunity.
Now, plaintiffs argue that the CDA does not protect defendants from claims seeking to recover the value of illegal sales of online casino chips. They primarily argue that the defendants are not publishers or speakers of third-party content, first asserting that “the booking of illegal gambling transactions is not ‘posting'”. The opposition claims that in 2018 the Ninth Circuit made this clear in HomeAway.com c. City of Santa Monica.
According to the plaintiffs, the case supports the proposition that “platforms” are not responsible for the content “others post on their websites, but are responsible for the illegal “booking” of home rental transactions unlicensed”. They claim that the facts of this case are indistinguishable from the present with respect to the defendants’ role in facilitating the purchase of illegal transactions.
The plaintiffs also note that the defendants cannot escape liability on the grounds that their tools are available for other applications, which they claim does not immunize the platforms from participating in illegal gambling operations.
The Plaintiffs are represented by Acting Lead Counsel Edelson PC.
Apple is represented by DLA Piper LLP (USA), Facebook by Gibson Dunn & Crutcher LLP and Paul Hastings LLP, and Google by Baker & McKenzie LLP.