Amazon has reached a proposed class-action settlement that could allow U.S. consumers to pursue more than $200 million in damages from third-party developers of social casino applications. Filed on Thursday in the U.S. District Court for the Western District of Washington, the settlement requires judicial approval before it can take effect.
The lawsuit, initiated in 2023, alleged that Amazon violated Washington State’s gambling laws and consumer protection statutes by processing in-app purchases for social casino games on its Appstore. Plaintiffs argued that Amazon acted as an intermediary by handling transactions for casino-style games that they claimed constituted illegal gambling under state law.
Settlement Mechanics and Developer Responsibility
Under the proposed agreement, Amazon will not pay the class directly. Instead, the company has consented to the entry of a $201 million judgment and will assign to the plaintiff class its legal rights to pursue reimbursement from the developers responsible for the apps. Class members would agree not to enforce the judgment against Amazon itself.
The settlement effectively shifts the financial obligation from Amazon to the social casino developers. The judgment represents roughly 30 percent of the total amount class members spent on virtual chips within the apps during the relevant period. Amazon has also agreed to contribute $2.5 million to cover initial costs associated with class notice and settlement administration.
Social casino applications differ from traditional online gambling because users play with virtual currency instead of cash winnings. Critics, however, argue that these apps encourage repeated purchases of virtual chips, promoting gambling-like behavior without offering tangible monetary rewards.
Washington State has among the strictest gambling laws in the U.S., and courts have previously ruled that virtual chips can constitute “things of value,” providing the legal basis for multiple lawsuits targeting social casino operators and platforms that distribute their applications. Previous settlements with developers have already returned over $650 million to consumers nationwide.
Plaintiffs’ attorneys described the settlement as a significant milestone in their ongoing campaign. “The class is poised to recover a significant portion of their total losses that keeps pace with the settlements achieved against the social casino developers,” the lawyers stated in court filings.
Parallel Cases Involving Other Technology Companies
Amazon’s settlement comes amid broader litigation targeting other major technology companies. Apple, Google, and Meta face lawsuits over similar allegations that they facilitated illegal gambling transactions in social casino apps. These cases include claims under the Racketeer Influenced and Corrupt Organizations Act (RICO).
Despite Amazon’s agreement, the company continues to deny any wrongdoing. The settlement does not establish liability but provides a mechanism for consumers to recover funds from the developers while ending Amazon’s direct involvement in the litigation.
If approved by the court, the agreement will allow class members to pursue claims directly against the app developers through a litigation trust known as the Edelson PC Amazon Social Casino Litigation Trust. According to Public Technologies, the case, Steven Horn v. Amazon.com Inc., is assigned case number 2:23-cv-01727-RSL in the Western District of Washington.
The settlement represents a key development in ongoing scrutiny of the social casino industry and technology platforms that facilitate in-app purchases for such games, potentially shaping the approach to consumer protections and digital payments in this segment.