Law Firm Hoping To Add Legal Losses To Plaintiffs' Gambling Losses By Suing Google, Apple Over Casino Apps

from the huckster,-llc dept

There's a new cottage industry of Section 230 lawsuits springing up from the law offices of Tycko & Zavareei in Washington, DC (with the assistance of Pearson, Simon & Warshaw of California, the state where the lawsuits are being filed).

Over the past few years, we've seen a plethora of lawsuits alleging vicarious liability for terrorist attacks being filed against social media platforms by opportunists at 1-800-LAW-FIRM and Excolo Law. Not a single one of these lawsuits has made it past the pleading stage, even if one Ninth Circuit judge went off the rails a bit during oral arguments last spring. Whatever Section 230 immunity doesn't eliminate, the law firms' decision to sue the wrong parties (i.e., anyone but the people who committed the crimes) has generally proven fatal to their claims.

Fortunately, this new batch of lawsuits doesn't involve exploiting people who've recently suffered personal tragedies. Instead, they're trying to force companies like Google and Apple to reimburse small-time losers who lost real money to gambling apps.

No less than five putative class actions over (incredibly small) gambling losses have been filed by Hassan Zavareei of Tycko & Zavareei and Daniel Warshaw of Pearson, Simon & Warshaw. The only unique factor is the dollar amount of gambling losses. But these aren't whales. These are small fish in the online gambling ocean demanding courts order app store purveyors pay them back for the tens of dollars they've lost. Not a single one of these plaintiffs has lost more than $300 to gambling apps, but every single one of them is demanding a chunk of damages their attorneys claim exceeds $5,000,000.

Everything is boilerplate, other than the named plaintiffs' individual losses and their choice of app store purveyor. Apple is named in one lawsuit. Google is named in all the others. But they're all equally ridiculous. Feast your eyes on this accusation:

Google permits and facilitates illegal gambling by operating as an unlicensed casino.

The lawsuits reach this conclusion by noting Google (and Apple) allow users to download gambling apps from their app stores. At no point do Google or Apple create and develop any gambling apps, nor do they operate or maintain ownership of the apps. All they do is offer a storefront. Users are responsible for their own actions while interacting with third-party apps. The companies do not need to obtain licenses to operate casinos because… THEY DON'T OPERATE CASINOS.

The lawsuits then do a bit of narrative explaining the obvious: gambling can be addictive and it can cost people vast sums of money. The suits also note that several states have laws prohibiting exchanging money for more playing time -- some of those put in place recently to protect users from things like pay-to-win games and "loot boxes," which some states have chosen to view as another form of unlicensed gambling.

Then the lawsuits quote liberally from the Statute of Anne -- something we've seen misquoted more often in terms of copyright enforcement here at Techdirt, even though it was instrumental in creating the idea of "public domain." The relevant part of the Statute, passed in 1710 partly as a legislative attempt to prevent British citizens from gambling themselves into bankruptcy, allowed residents to sue to recoup their gambling losses. (That it was repealed almost entirely in 2005 seems to have escaped the notice of the find legal minds at both law firms.)

[A]ny Person . . . who shall . . . by playing at Cards, Dice, Tables, or other Game or Games whatsoever, or by betting on the Sides or Hands of such as do play any of the Games aforesaid, lose to any . . . Person . . . so playing or betting in the whole, the Sum or Value of ten Pounds, and shall pay or deliver the same or any Part thereof, the Person . . . losing and paying or delivering the same, shall be at Liberty within three Months then next, to sue for and recover the Money or Goods so lost, and paid or delivered or any Part thereof, from the respective Winner . . . thereof, with Costs of Suit, by Action of Debt . . . .

So how does a 1710 British law factor into a bunch of online gaming lawsuits filed in the United States? Well, a lot of nascent US states adopted British laws because they didn't have many of their own at that point. And it was safe to assume newly minted US citizens were just as likely to make bad decisions in games of chance. So, these laws went into the books, along with other large chucks of the Statute of Anne and its offshoots.

This aspect of the Statute has rarely the focus of gambling related litigation. But it has been used successfully in a few cases where courts allowed families/significant others to sue over gambling losses, usually under the theory an entire family shouldn't be put into the poorhouse just because one of its residents blew a bunch of money on gambling. And in the cases that did secure a victory, the amount at stake was hundreds of thousands of dollars, rather than the $160-250 range represented in these lawsuits.

Only twenty-five states have adopted this aspect of the Statute of Anne. The litigants represented here are from states that adopted the anti-gambling text. But it's not going to be nearly as helpful as they believe it will be. At best, the law simply makes some gambling debts unenforceable.

Online gaming in virtual casinos (unlike more direct gambling options like online betting services that provide actual cash payouts) don't incur gambling debt, even if they may result in regular, non-gambling debt if users spend too much money gaming. No one is under any obligation to pay to do more gaming, nor are they able to obtain credit from app operators to continue gaming, which makes it impossible to rack up the sort of gambling debt this Statute was adopted to address. That's just the beginning of the apparently willful misreading of this law by the attorneys representing these clients. There's more.

First, the lawsuits have been filed in California, which -- as a late-arriving member of the Union -- did not adopt this Statute. Second, even if the courts decide that the losses occurred in the plaintiffs' home states (rather than wherever the app developers' gaming servers are located), it's definitely not going to help in at least two cases. There's a case directly on point dealing with venue-shifting by Mississippi plaintiffs hoping to use another state's laws to allow them to recover gambling losses.

We too find that it would be a great injustice if Tennesseans could reap the benefits of gambling in states where it is legal when they are successful, but seek shelter in Tennessee courts when they lose. As a result, we conclude that there is nothing in the Mississippi laws in question that outrages the public policy of Tennessee. Therefore, the gaming contract between the parties is enforceable in Tennessee.

This means the two plaintiffs from Mississippi aren't going to be able to use another state's laws to claw their money back from Google and Apple. But even if local laws are given deference -- along with the residents' claims their losses occurred in Mississippi -- it still won't work. The adoption of the Statute of Anne varies from state-to-state. In some states, it only allows for government enforcement via suits brought by the state attorney general. In other states, gambling losers can sue directly, but they have to sue the entity they lost money to. No matter how the local laws are interpreted, they cannot be read to allow people who lost money to online casinos to sue a third-party that never took any money from them.

But there's really no reason to even get into the weeds of local laws adopted hundreds of years ago by newly developed states in a brand new country. The lawsuits all note the plaintiffs lost money to app operators like Zynga, SpinX Casino, and DoubleUGames. None of those companies are listed as defendants. Only the operators of app stores are. And that's not going to work. You have to sue the party that injured you, not one at least once step removed from the equation.

Section 230 allows Google and Apple to exit lawsuits that claim they're responsible for content -- including apps -- uploaded by third parties. This holds true even if the content is vetted by Google, etc. before being allowed to go live. Moderation (or this perceived lack thereof) does not undermine these protections.

But that argument likely isn't even likely to be considered. Suing the wrong party should result in dismissals even if the court decides not to consider Google and Apple's expected Section 230 defense. You just can't hope to win a case if you're not willing to sue the right defendants.

The only silver lining in this batch of bad-faith litigation is the plaintiffs haven't lost hundreds of thousands of dollars gambling at this point, so they likely haven't destroyed anyone's lives at this point, not even their own. But who's going to take up the case of possibly hundreds of class-action plaintiffs who are going to be duped by law firms and lawyers like those pushing these cases? I mean, as long as we're talking about holding other people responsible for your own bad decisions, why not find someone willing to go after shit-heel attorneys padding their resumes with the sad stories of rubes they've duped into believing they actually have something worth suing over?

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Filed Under: app stores, apps, class action lawsuits, gambling, intermediary liability, loot boxes, section 230
Companies: apple, google, pearson simon and warshaw, tycko and zavareei


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  • icon
    sumgai (profile), 29 Mar 2021 @ 11:18am

    ... the plaintiffs haven't lost hundreds of thousands of dollars gambling at this point, so they likely haven't destroyed anyone's lives at this point...

    It's a matter of perspective, attempting to assign where, and how much, destruction occurs. I'd hazard a guess that these suits are not being "sponsored" by the attorneys, that the plaintiffs are indeed ponying up considerable sums of cash to get the ball rolling. That will certainly threaten the life of one's wallet (or the collective wallet of the class), I'm sure.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 29 Mar 2021 @ 12:36pm

      Re:

      Indeed, assuming the parasitic lawyers aren't filing for free in exchange for a cut of any 'go away' money Google or Apple might throw at them(which they would be stupid to do) I suspect that the fools are going to be paying much more to said lawyers then they lost to the gambling apps.

      reply to this | link to this | view in chronology ]

      • identicon
        Bobvious, 30 Mar 2021 @ 2:18am

        Re: Re:paying much more

        Wait. So are you saying that the plaintiffs are gambling on the outcome of these lawsuits?

        Will they then sue their own lawyers for "facilitating losses" when they ultimately lose? Or will they instead sue the courts for providing a forum through which such losses can occur?

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 29 Mar 2021 @ 1:14pm

      Re: Re: Re: Re: Re:

      The community appreciates automatic spam moderation. Nobody needs to read meaningless comments.

      reply to this | link to this | view in chronology ]

  • icon
    Beefcake (profile), 29 Mar 2021 @ 11:34am

    By that logic

    am I an unlicensed casino? I have insurance.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 29 Mar 2021 @ 12:44pm

    Ah Steve Dallas lawsuits, 'Why sue the relatively poor tool maker when you can go after the much richer company that sold the tool?'

    Hopefully the judge(s) involved see this blatant attempt to extort money from richer companies as the cash-grab it is and laugh it out of court, maybe with a note that if the 'victims' want to spend their money in a productive manner counseling for their addiction is a much better choice than trying to sue (the wrong) companies for their own actions.

    reply to this | link to this | view in chronology ]

    • icon
      sumgai (profile), 29 Mar 2021 @ 2:26pm

      Re:

      In addition to the gentle advice from the bench about seeking counseling, I'd opt for the judge to hand out sanctions to the lawyers for not advising the clients that this was a non-starter in the first place. Sanction #1 would be to return all fees, including "expenses" to the client(s). Sanction #2 would be to pay court costs for the time it has wasted on this malarkey.

      Weirdly, Sanction #3 would not be to attend an Ethics class, but to teach such a class... to non-lawyers as well as lawyers. That way, the class attendees each grade the lawyer on presentation as well as the material, and the judge gets a Reader's Digest version of those "report cards". That might smarten up some of these yahoos, but only time would tell if I'm heading in the right direction on this particular train of thought.....

      reply to this | link to this | view in chronology ]

  • identicon
    Glenn, 29 Mar 2021 @ 1:53pm

    So, all the same reasons why Amazon isn't responsible for third-party products sold through Amazon that unfortunately harmed someone using the product(s) in question.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 29 Mar 2021 @ 1:59pm

    'Merika!
    Where its never my fault for things I've done, its the fault of the guy with the deepest pockets remotely connected to it!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 29 Mar 2021 @ 2:08pm

      Re:

      I wanted a Tesla so I gambled away my life savings trying to get more money to buy a Tesla, therefore Elon Musk owes me 5 million dollars because I wouldn't have wanted a Tesla without his involvement!!!

      reply to this | link to this | view in chronology ]

  • icon
    fairuse (profile), 29 Mar 2021 @ 3:06pm

    Virtual Casino, Horse Racing and State Laws

    I do not play casino games, cards, dice, fantasy sports so I may not get why suing for losses makes sense

    It all begins with the phrase, "Download app for free". I think I see how Virtual Casino works, it's a game that you pay real money via credit card, to play. When you get stuck in some bad luck at poker, fold, the "points" which were purchased go to the house. When you get winning hand of poker your "points" go up.

    If it's a bad luck day and the player hits up credit card to keep playing to get back to even then it's the player who is to blame. I don't understand how playing a game via app, which has all kinds of warnings about "in app purchases" gets lawsuit.

    Maybe I'm missing the point - Not a physical casino, a game, the game is doing something like pay $xx.xx to get to the next level but in terms of raise, call or fold.

    Horse Racing and State Law:

    I bet the ponies now and then, it's fun. Going to the track is why it is fun - can't imagine betting on Virtual Horses in a game app, it is pointless. The difference is horse betting via regulated off track betting (OTB) app is not a game, live races, real money. I was in South Carolina trying to bet on a horse race using the app interface to OTB and got "Login not allowed from state you are located".

    There are many reasons for that and I could not say why. I wonder if something as mundane as suing to recapture losses is one reason.

    How wrong am I? Really, they were playing simcity or other connected people and lost - walk away or don't play any game that wants $ so you advance.

    reply to this | link to this | view in chronology ]

    • icon
      That Anonymous Coward (profile), 2 Apr 2021 @ 2:31pm

      Re: Virtual Casino, Horse Racing and State Laws

      appears in a cloud of brimstone

      Hi I'm the poster nym for landing in moderation.

      I manage to trigger moderation more than the average poster (excluding the screamers).

      No technology is perfect, it makes mistakes.

      Do know that TeamTechDirt does look in the moderation pile & sets mistakenly flagged posts free.

      I can see phrasing in your post that would trip a bot, you did nothing wrong, they did nothing wrong.

      Sometimes the price paid to stop the firehose of bad posts, consider the few spam posts you do actually see vs the thousands that never make it, is good posts flagged.

      While the Team sometimes thinks I'm upset when I trip it, often all it takes is a ping asking them to jiggle the handle. It happens sometimes (to some of us MUCH MORE OFTEN!!!!!) but they do their best.

      I know its annoying to see the moderation message & your post being delayed (trust me I've seen it more), but it will appear. The alternative is seeing so many spam posts that no one would bother... and well I don't like that idea.

      vanishes with a poof

      reply to this | link to this | view in chronology ]

      • icon
        That Anonymous Coward (profile), 2 Apr 2021 @ 4:02pm

        Re: Re: Virtual Casino, Horse Racing and State Laws

        giggles

        Why yes, my previous post DID trigger moderation. :)
        I think I would have been, I dunno I am sure there is some sort of german word for the feeling.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Mar 2021 @ 6:23pm

    S230 not relevant

    Surely S230 isn't relevant because Apple, Google, etc. aren't just acting as a listing site, but also a payment processor.If you could use S230 to escape whatever liability might exist here (and,TBH, I can't see that there is any) then so could Amazon for selling dodgy goods.

    reply to this | link to this | view in chronology ]

    • icon
      Bluegrass Geek (profile), 30 Mar 2021 @ 1:57pm

      Re: S230 not relevant

      They're only acting as a payment processor if the gambling app is using Apple's/Google's payment system.

      More likely, the app has a "enter your credit card number here" setting and is processing the transactions directly.

      reply to this | link to this | view in chronology ]

  • identicon
    Another Coward, 30 Mar 2021 @ 8:18am

    Um, it's not illegal gambling except in Washington State

    All the apps specifically mentioned are "play for fun" casinos with no ability to win actual money. They aren't illegal gambling except in Washington State.

    reply to this | link to this | view in chronology ]

  • icon
    Dilanio (profile), 16 Apr 2021 @ 3:48am

    thanks for this!

    reply to this | link to this | view in chronology ]


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