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Amazon has agreed to a proposed $201 million settlement that could allow consumers to seek compensation from social casino app developers over allegations that the company facilitated illegal gambling transactions through its Appstore.
The agreement, which does not include an admission of wrongdoing from Amazon, would resolve a 2023 class action lawsuit alleging the company violated Washington state gambling laws and the state’s Consumer Protection Act. The proposed settlement was filed in the U.S. District Court for the Western District of Washington in Seattle and still requires court approval.
Lawsuit claims Amazon enabled illegal gambling
The lawsuit was filed by Nevada resident Steven Horn, who alleged Amazon violated Washington law by processing purchases tied to social casino apps available through its Appstore.
The complaint claimed Amazon collected a 30% commission on transactions involving virtual chips purchased by users. The apps at the center of the dispute included titles such as Big Fish Casino, Quick Hit Slots and Lightning Link Casino.
These games allow users to purchase virtual chips with real money after free credits run out. While players can continue playing with those chips, they cannot withdraw winnings as cash. The lawsuit argued that virtual chips may qualify as items of value under Washington law, a key issue in previous legal disputes involving social casino apps.
Settlement reimbursement shifts to app developers
Under the proposed agreement, Amazon would not create a traditional settlement fund that directly pays consumers. Instead, the company would allow a $201 million judgment to be entered against it while transferring its contractual rights against app developers to a litigation trust.
Consumers would then seek reimbursement from the developers rather than collect the judgment directly from Amazon.
The company would also pay $2.5 million to cover settlement administration expenses and consumer notification costs. Attorneys for the plaintiffs said the $201 million figure represents approximately 30% of class members’ spending on the apps and was calculated using transaction records provided by Amazon during the discovery process.
Amazon maintains it did nothing wrong
Amazon continues to deny liability in the case. The company said the settlement would allow it to continue offering third-party applications through its Appstore while requiring developers to comply with applicable laws.
Amazon also said developers must make changes designed to improve the customer experience and that the company retains the ability to remove applications from its platform at its discretion.
Settlement follows broader social casino litigation
The proposed agreement is part of a larger legal campaign targeting social casino developers and technology platforms that distribute casino-style mobile games.
Plaintiffs’ attorneys said previous settlements involving social casino developers have returned more than $650 million to consumers nationwide. They argued the Amazon agreement would allow class members to pursue a significant portion of their alleged losses.
Reuters reported that the settlement structure would allow consumers to pursue claims against social casino developers through a litigation trust rather than seeking payment directly from Amazon. The report also noted that the case is among several legal challenges examining whether technology platforms can be held responsible for distributing social casino apps that allegedly violate gambling laws.
Similar lawsuits target Apple, Google and Meta
Amazon’s proposed settlement comes as other major technology companies face similar lawsuits involving social casino apps.
Apple, Google and Meta have all faced claims alleging their platforms helped distribute apps that functioned as illegal gambling operations. Those cases remain ongoing, with companies disputing allegations that they are responsible for the conduct of third-party app developers.
Reuters reported that the Amazon case could have broader implications for how courts evaluate app store responsibility and virtual currencies used in social casino games.
Settlement faces final review in federal court
The proposed settlement is not final. The court must grant preliminary approval, certify the class and hold a final approval hearing before consumers receive official notice about their options.
If approved, the agreement would rank among the largest settlements tied to disputes over social casino applications and could influence future legal battles over virtual currencies, app store oversight and digital gambling regulations.
