Apple Hit With Class Action On Allegations Of Running An 'Unlicensed Casino'

Apple Inc. AAPL has been hit with a class-action lawsuit that accuses the tech giant of profiting from illegal gambling apps on the App Store, AppleInsider reported Tuesday.

What Happened: The lawsuit, filed on behalf of plaintiffs Joshua McDonald and Michael Helsel, states that Apple has profited from illegal gambling games developed by DoubleU Games Co. It alleges that the apps constitute illegal gambling pursuant to various state laws.

Apple is reportedly accused of operating as an "unlicensed casino" by selling and distributing several free-to-play casino games, which use in-game currency like “coins” or “chips” in lieu of actual money. The lawsuit notes that users will be prompted to use the actual currency to play the game when they ultimately run out of coins or chips.

According to the complaint, paying money in a game for a chance to win more playing time violates the anti-gambling laws of 25 states. The lawsuit is seeking class-action status in all those states, as per the report.

The lawsuit is demanding a jury trial and asking for an injunction prohibiting Apple from taking part in the allegedly illegal action. It also seeks statutory damages and other costs.

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Why It Matters: This is not the first time that Apple has been hit with a lawsuit alleging it benefits from illegal gambling apps. In October 2020, a woman sued Apple alleging that dree-to-play with in-game currency games on the App Store constitute illegal gambling, according to another report by AppleInsider.

Bloomberg reported in August 2018 that Apple removed thousands of gambling apps from its Chinese store after the state-run China Central Television accused the company of being slow to clean up illegal content.

It was reported in July last year that Apple saw more than 2,500 games removed from the App Store in China in the first week of July.

Price Action: Apple shares closed about 0.3% higher on Tuesday at $126.21.

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