Ohio Class-Action Lawsuit Filed Against Apple, Inc. Alleging Illegal Gambling on the App Store

On Friday, October 23, 2020, a class-action lawsuit was filed against Apple, Inc., on behalf of Ohio residents, alleging that Apple “promotes, enables, and profits from games downloaded from its App Store. . . that constitute illegal gambling.” Plaintiff Sean McCloskey filed the lawsuit in the U.S. District Court, Southern District of Ohio, seeking recovery of all money paid through in-app purchases in gambling games made through Apple’s App Store, pursuant to Section 3763.02 of the Ohio Revised Code.

The complaint alleges that the gambling apps in question are initially free to download but utilize in-app purchases to entice users to continue using the apps. Apple takes a 30% processing fee of all in-app purchases, which the complaint notes is “many times the charge that other payment processors outside the Apple ecosystem. . . charge for processing such payments.” The specific apps in question in the lawsuit are characterized as “no more or no less than casino-style slot machines, casino style table games, and other common gambling games.” App users are given a set number of free starting “coins,” and users can either win more coins or purchase additional coins using real money. Users cannot collect cash as a result of winning games but, instead, are awarded more coins, thus resulting in additional playing time.

Ohio Revised Code Section 2915.01(C)(7) states that “[v]aluable consideration is deemed to be paid for a chance to win a prize [when a] participant may purchase additional game entries by using points or credits won as prizes while using the electronic device.” Further, Ohio case law has concluded that the payment of real money in a game for an opportunity to win free replays or additional playing time constitutes illegal gambling. The complaint states that Apple “is the principal promoter and facilitator of the illegal activity” because it “maintains dictatorial control over what apps can be downloaded from the App Store, and the payment method to purchase in-app items.” Further, the complaint alleges that, despite having the technology and ability to geo-restrict app usage, Apple has not done so in Ohio.

The complaint seeks to certify a class of “[a]ll Ohio residents who downloaded, played, and paid money for additional coins within games from the Apple App Store that featured slots, roulette, blackjack, poker, keno, craps, and other kinds of casino-style gambling games, bingo, or simulations thereof, where the player had a chance to win coins or other means to play for additional periods of time.” The complaint seeks relief in the form of “a refund of all money paid through the illegal gambling games described [in the complaint.]”

Additional Reading

Ohio Consumer Sues Apple For Allowing “Scheme of Chance” Gambling Games On App Store, Law Street Media (October 26, 2020)

McCloskey v. Apple, Inc. (Case No. 3:2020cv00434)

Complaint in McCloskey v. Apple, Inc.

Photo Credit: OpturaDesign / Shutterstock.com