Last Friday, the consumers taking on Apple, Facebook, and Google in court over their role in the allegedly illegal “social casino enterprise,” earning them billions from online casino chip sales transactions, said that the companies cannot invoke a Section 230 Communications Decency Act (CDA) defense. They opposed dismissal, arguing that the provision does not extend to defendants who facilitate illegal transactions for a fee, even when those transactions flow from third-party content.
The consolidated suit filed against the three companies in November 2021 alleges that the online platforms support an illegal gambling empire at consumers’ expense. Particular to these kinds of games, “social casinos,” is players’ ability to purchase more playing time or chances with fiat currency, but their inability to win anything other than more chances to play.
According to the filing, social casinos are illegal under some states’ gambling laws. It details how some consumers, drawn to the games because of their addictive nature, have lost thousands of dollars, while enriching the game makers and the companies that facilitate the purchase of apps and in-app purchases through the Apple App Store, the Facebook App Center, and the Google Play Store.
Last month, the companies moved to dismiss pursuant to the Section 230 of the CDA in separately filed motions. For its part, Facebook contended that it, an interactive computer service, is the “publisher or speaker” of content created wholly by third parties. Facebook also cited an early 2022 decision issued in the same district dismissing a gambling game-related suit against Google based on Section 230 immunity.
Now, the plaintiffs contend that the CDA does not shield the defendants from claims seeking to recover the value of the illegal online casino chip sales. They chiefly arguing that the defendants are not publishers or speakers of third-party content, first asserting that “booking illegal gambling transactions is not ‘publication.’” The opposition asserts that in 2018, the Ninth Circuit made that clear in HomeAway.com v. City of Santa Monica.
According to the plaintiffs, the case stands for the proposition that “platforms ‘face no liability for the content’ others post on their websites, but do face liability for illegally ‘booking’ unlicensed home rental transactions.” They claim that the facts of that case are indistinguishable from the instant ones insofar as the defendants’ role in facilitating the purchase of illegal transactions.
The plaintiffs also note that the defendants cannot escape liability on grounds that their tools are available to other apps, which they say does not immunize the platforms’ participation in illegal gambling operations.
The plaintiffs are represented by interim Lead Counsel Edelson PC.
Apple is represented by DLA Piper LLP (US), Facebook by Gibson Dunn & Crutcher LLP and Paul Hastings LLP, and Google by Baker & McKenzie LLP.
