Judge Approves Double Down Settlement In Washington Illegal Gambling Lawsuit

Written By Derek Helling on June 5, 2023
class action lawsuit settlement papers with double down casino logo

As individual states and the US federal government continue to take varying levels of action against illegal gambling, civil actions by private citizens can be a path to enforcement as well. The recent settlement of a class action lawsuit against Double Down Casino provides a stellar example.

While the operator of the online social casino escapes liability for potentially violating Washington state law as part of the settlement, enforcement by deterrence is nonetheless the result of the action. However, it’s foolish to assume the model of private enforcement would be as successful on a larger scale when it comes to illegal gambling in the US.

Double Down Casino agrees to terms with Washington plaintiffs

Last week, US District Judge Robert Lasnik approved the terms of a settlement in Benson et al v. DoubleDown Interactive LLC et al. The full cost of the settlement is pending, although an estimate puts it at $415 million. The plaintiffs alleged that the social casino’s operation in Washington violated state law in constituting illegal gambling.

Social casinos differ from real-money online casinos in that you don’t have to risk actual money to play the games on social casinos. You can still win prizes playing their games, however. Many of them will sell players virtual currencies used to play games should players desire to purchase them.

Washington is one of a few US states where the laws preclude such entertainment forms. In most states, the option to play for free is sufficient to circumvent online gambling prohibitions. As Mike Scarcella of Reuters reports, Double Down has not admitted that its operation in the state violated Washington law.

However, it is likely that going forward, Double Down will not allow people in Washington to play its games. Many other social or sweepstakes casinos also exclude Washington players for this very reason.

At the same time, this result is no guarantee that other civil actions would have similar success. There are unique elements to these particular proceedings that it’s difficult to assume would play out the same way. Thus, attempting to deter illegal gambling on a larger scale via private enforcement would be gambling in and of itself.

Criminal actions could still be more effective deterrence

Many bodies related to the US gambling industry have cried out for more action from law enforcement bodies in deterring illegal gambling. These include the American Gaming Association and the individual gaming regulatory bodies of eight states recently.

In the absence of such action, the settlement of Benson might suggest that private enforcement could be an alternative. For certain, that possibility exists. However, it faces some of the same obstacles criminal prosecution of unlicensed online gambling does.

First, there’s the challenge of identifying exactly who the responsible party is. In many cases, those may not be US citizens. In that case, getting them to the United States for trial could be insurmountable. Furthermore, enforcing a court action against a non-US citizen could prove difficult as well.

Beyond those common challenges, private enforcement has some unique obstacles of its own. In civil proceedings, plaintiffs need not only substantiate how the defendants violated some legal standard but also how that violation did actual harm to the plaintiffs.

In Benson, it was relatively easy to navigate these obstacles because the operator of the casino was easily identifiable and the relevant statutes in the jurisdiction were quite friendly to the plaintiffs. Scarcella says Lasnik nonetheless characterized the process of reaching the settlement as “risky, novel, and hard-fought.”

If they deter illegal gambling, though, such actions might be worth the risk. Waiting on the US Justice Dept. to take action might be doubling down on a losing premise.

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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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