A California woman has filed a class action lawsuit against Apple in the United States District Court for the Northern District of California alleging that Apple profits from illegal gambling games developed by Zynga, Inc. (“Zynga”) and offered, sold, and distributed by Apple through its App Store. The Plaintiff brings this action on behalf of herself, and 25 Multistate[1] and State Classes for all persons who paid money to Apple for coins to wager in the Zynga Casino Apps.

The facts of the February 16, 2021 complaint allege that once a consumer opens a Zynga Casino App, which offers a variety of casino style games, the consumer is given free “coins” or “chips” to start playing the game. A loss in the game results in a loss of coins or chips, with further opportunities available to win additional amounts. Although consumers do not have the chance to collect actual cash as a result of “winning” games, they do have the ability to win and acquire more playing time. However, once the consumer runs out of their free coins or chips, they will be prompted to use real money to purchase additional coins or chips, paid directly to Apple, for the opportunity to continue playing. In this case, the Plaintiff downloaded a Zynga Casino App, Wizard of Oz Slots, from the App Store and initially played with her free coins. Eventually, she purchased over $250.00 worth of additional coins through in-app purchases paid directly to Apple in order to continue playing.

The complaint alleges two counts. The first count is for a violation of Civil Remedy Statutes for Recovery of Gambling Losses (“Civil Remedy Statute”) applicable to the Multistate Class. The complaint alleges that by purchasing coins from Apple to wager in the Zynga Casino Apps, the Plaintiff and each member of the Multistate Class, gambled and lost money within the meaning of the applicable Civil Remedy Statute, which prohibits a person from profiting on an unlawful gambling activity and provides for the recovery of money paid and lost due to such gambling activity.

Secondly, the complaint alleges unjust enrichment since as a result of its conduct, Apple has and will continue to be unjustly enriched to the detriment of the Plaintiff and the Class members by mere virtue of their purchase of coins from Apple to wager in the Zynga Casino App through the App Store. Further, the Plaintiff seeks injunctive relief and to recover money paid and lost due to gambling in the Zynga Casino Apps and to grant certification of the proposed Multistate and State Classes.

Although this case has yet to be certified as a class action lawsuit, the focus of this case relies on whether or not an in-app purchase for extension of play constitutes a prize. If so, Apple, as the intermediary for the in-app purchases, is alleged to be part of an illegal gambling scheme.

This lawsuit presents interesting challenges and will be closely monitored by many in light of the recent cases in Washington, which were discussed in previous blog posts. If you have any questions pertaining to this case or related to in-app purchases, please contact authors Karl Rutledge at krutledge@lrrc.com, Glenn Light at glight@lrrc.com, or Mary Tran at mtran@lrrc.com.

 

[1] The twenty- five states are: Alabama, Arkansas, Connecticut, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, and West Virginia.

Authors

Karl F. Rutledge
Karl F. Rutledge
Partner, Chair - Commercial Gaming Group
krutledge@​lrrc.com
702.949.8317
Mary Tran
Mary Tran
Associate
mtran@​lrrc.com
702.474.2666

Related Attorneys

Related Services

Related Industries