Amazon and consumers suing the company have asked a federal judge in Washington to give preliminary approval to an unusual class action settlement that would let consumers pursue more than $201 million from app developers instead of collecting directly from Amazon.
The unopposed motion, filed July 9 in the U.S. District Court for the Western District of Washington, would resolve claims that Amazon violated Washington gambling law and the state’s Consumer Protection Act by processing payments for virtual casino chips sold in more than 200 social casino apps on the Amazon Appstore. Amazon denies wrongdoing and liability but is not opposing the requested procedural steps.
“The proposed Settlement converts a difficult and risky litigation into a clear path to financial recovery whereby Settlement Class Members can get back the same portion of spending as in the prior developer settlements—which for Settlement Class Members with the highest spending levels results in life-changing sums.” – Steven Horn et al. vs Amazon
The case began in November 2023 when plaintiff Steven Horn alleged Amazon served as the exclusive payment processor for in-app chip purchases while keeping a 30% commission from every transaction. The complaint argues Amazon shares responsibility with developers because it helped facilitate transactions involving games that allegedly qualify as illegal gambling under Washington law. Amazon disputes those claims and says, among other defenses, that Section 230 of the Communications Decency Act shields it from liability.
Amazon gambling settlement shifts claims to developers
Rather than requiring Amazon to pay the full amount, the parties propose a $201,355,607.75 covenant judgment reflecting 30% of class spending across the social casino apps. Amazon would provide $2.5 million for notice and settlement administration. In exchange, class members would agree not to enforce the judgment against Amazon. Instead, Amazon would transfer its contractual indemnification rights against 32 app developers to a litigation trust, which would pursue those companies and distribute any money recovered to the class.
Plaintiffs told the court the arrangement recognizes Amazon’s distinct legal position because it can raise defenses, including Section 230 immunity, that developers generally cannot. They argue the agreement lets consumers pursue “the same percentage of the Class’s alleged damages” achieved in earlier developer settlements while reducing the uncertainty and delay of continued litigation. Court filings say six previous settlements involving social casino developers have returned more than $650 million to consumers.
The proposal also includes future changes for participating apps on the Amazon Appstore. Developers would have to let players continue after exhausting virtual chips without requiring another purchase. They would also need to provide spending limits, purchase blocking tools, and account suspension or closure options. Amazon would remove apps that fail to comply.
The Washington case arrives as other technology companies continue facing similar legal challenges. Apple, Google, and Meta are defending lawsuits alleging they profited from gambling-style apps on their platforms through payment processing and commissions. Reuters reported that U.S. District Judge Edward Davila rejected their bid to dismiss those claims entirely based on Section 230, allowing the litigation to continue while leaving room for future appeals.
The plaintiffs now want Judge Robert S. Lasnik to certify the settlement class, approve the notice plan, grant preliminary approval, and schedule a final approval hearing. Amazon continues to deny liability but “does not oppose the specific relief sought” in the motion.
ReadWrite has reached out to Amazon for comment.
Featured image: Amazon via Canva
