Suit accuses Apple of profiting from illegal gambling

Hearing that Apple is being sued is not a surprise since it seems to happen often. Every attorney has the phone number of Apple General Counsel Katherine Adams in his or her Rolodex. Today, a lawsuit against Apple was filed in in the U.S. District Court for the Northern District of California. The complaint alleges that Apple is making money and profiting from illegal gambling.

The suit, published by Scribd (via AppleInsider), focuses on free-to-play casino apps that allows users to buy in-game currency using real money. These so-called "social casino apps" allow smartphone and tablet owners to experience Vegas-style gambling using virtual slot machines. However, Chips won can only be used by players to continue playing the virtual slot machines. While players can't make real money, Apple is since it gets 30% of in-app purchases including those for casino chips. The complaint says, "By utilizing Apple for distribution and payment processing, the social casinos entered into a mutually beneficial business partnership."

The lawsuit points out that through the App Store, Apple helps in the distribution of these apps, gives developers data and other info on users, and uses its in-app payment platform to process in-app payments. The plaintiffs argue that Apple ends up with a cut that is higher than what the house earns in a real life casino.

The plaintiffs also state that "The result (and intent) of this dangerous partnership is that consumers become addicted to social casino apps, maxing out their credit cards with purchases amounting to tens or even hundreds of thousands of dollars." According to the filing, $6 billion was spent by consumers on virtual casino chips last year. The lawsuit seeks class action status adding that Apple is in violation of California law which bans slot machines. It also accuses Apple of racketeering and collection of unlawful debts.

The plaintiffs, Donald Nelson and Cheree Bibbs, spent at least $15,000 each in virtual casino currency both of whom are social casino users who have spent "at least $15,000 each" in virtual casino currency. The plaintiffs want Apple's actions to be ruled unlawful. They also want damages in the amount of their losses and want the court to order Apple to give up its "ill-gotten gains."