targets

Lawsuit Targets Google and Apple Over Sweepstakes Casino Apps

Apple-Google-get-hit-with-RICO-lawsuit-over-sweepstakes-in-New-Jersey Tech giants Google and Apple are under legal scrutiny in New Jersey, facing allegations of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. The lawsuit, filed on November 27, implicates their roles in hosting and processing payments for sweepstakes casino apps—a controversial sector blending social gaming with gambling-like features. Julian Bargo, the lead plaintiff, claims losses exceeding $1,000 while engaging with these platforms, which he asserts operate as illegal gambling enterprises.

Sweepstakes Casino Operations Under Fire

Sweepstakes casinos function by allowing players to use virtual currency purchased with real money to access gambling-like games, including slots, blackjack, and roulette. Some platforms add sweepstakes mechanics, offering real-money prizes to further entice users. While popular for their accessibility and entertainment value, these platforms have sparked criticism for allegedly turning smartphones into unregulated gambling devices.

Unlike traditional casinos, sweepstakes operators are not subject to U.S. licensing or regulatory oversight. This lack of regulation enables them to avoid gaming taxes, despite primarily targeting American consumers. Many major operators, such as Australia-based Virtual Gaming Worlds (VGW), are headquartered offshore. VGW, which runs platforms like Chumba Casino, LuckyLand Slots, and Global Poker, exemplifies the sector’s financial success, reporting $4 billion in revenue and $322 million in net earnings in 2023.

Critics argue that the regulatory gap disadvantages licensed operators who comply with strict U.S. laws. Additionally, the accessibility of these apps raises concerns about problem gambling, particularly among younger users drawn to their casual gaming format.

Legal Implications for Google and Apple

The lawsuit accuses Google and Apple of enabling these platforms by hosting their apps on the Google Play Store and Apple App Store. It further alleges that their payment systems, Google Pay and Apple Pay, facilitate transactions for purchasing virtual currency, effectively supporting and profiting from the alleged illegal activities.

According to the suit, “The sweepstakes casino enterprise is an association-in-fact composed of the App Defendants and the Gaming Defendants who are engaged in, and whose activities affect, interstate commerce, and which have affected and damaged interstate commercial activity.” The plaintiff asserts that both companies’ involvement constitutes a violation of RICO statutes, which are traditionally used to combat organized crime. By leveraging RICO’s provisions, the case remains in civil court, bypassing arbitration procedures that often apply to disputes involving app platforms.

Broader Industry and Regulatory Challenges

The rapid growth of sweepstakes casinos has drawn attention from the regulated gaming industry. Licensed online casinos operating in just seven U.S. states generated $6.1 billion in gross revenue in 2022, according to the American Gaming Association (AGA). In contrast, legal sports betting, available in over 30 states, brought in $11 billion during the same period. Stakeholders in the regulated market view sweepstakes platforms as a competitive threat operating outside traditional oversight mechanisms.

The lawsuit against Google and Apple underscores calls for stricter regulatory oversight of sweepstakes casinos. Advocates for regulation argue that aligning these platforms with traditional gambling laws would enhance consumer protections, ensure tax contributions, and level the competitive landscape. However, the offshore nature of many operators presents significant enforcement challenges.

As the case unfolds, it marks the first instance where Google Pay and Apple Pay have been named in legal action concerning sweepstakes casinos. Previously, similar lawsuits, such as one in Florida against VGW, included payment processors like Worldpay as co-defendants. This New Jersey lawsuit could set a precedent, reshaping how tech giants manage app platforms and payment systems linked to controversial gaming models.

Source:

“Google Pay and Apple Pay named in US sweepstake casino lawsuit“, paymentexpert.com, December 3, 2024.

The post Lawsuit Targets Google and Apple Over Sweepstakes Casino Apps appeared first on Casino News Daily.

New Alabama Bill Targets Illegal Gambling with Harsher Penalties

Bill-would-increase-penalties-for-illegal-gambling-in-Alabama-possession-of-slot-machines Alabama lawmakers are taking steps to strengthen their stance against illegal gambling through a new bill that proposes harsher penalties for those found in violation. The bill, introduced by Republican State Representative Matthew Hammett, seeks to address persistent issues with illegal gambling operations by upgrading penalties from misdemeanors to felonies. These changes are aimed at deterring repeat offenders and curbing illegal activities that have continued to thrive despite current laws.

Proposed Changes in Penalties

Under the current system, those involved in illegal gambling face misdemeanor charges, which come with a maximum sentence of one year in jail and a fine of up to $6,000. However, Rep. Hammett’s bill proposes to elevate these offenses to felony-level crimes. Specifically, promoting gambling would be reclassified as a Class C felony, carrying a possible sentence of one to ten years in prison and a fine of up to $15,000. For repeat offenders, the situation becomes even more severe, with a second violation resulting in a Class B felony, which could lead to a prison sentence of up to 20 years and a fine of $30,000.

Hammett collaborated with Covington County District Attorney Walt Merrell in drafting this legislation. The need for stronger enforcement became apparent after Merrell observed that existing laws were not effective in stopping illegal gambling activities, such as the sale of scratch-off tickets in convenience stores. “I asked him what could be done,” Hammett said, and they worked together on crafting a proposal that would give law enforcement more power to address these problems.

Persistent Illegal Gambling Issues

Illegal gambling has long been a challenge for Alabama authorities. Despite ongoing efforts to shut down these operations, many venues continue to operate. Jefferson County, in particular, has seen electronic gambling halls reopen after being shut down, showing the limitations of current enforcement. Attorney General Steve Marshall has been actively involved in efforts to combat these illegal activities, but the relatively light penalties often allow offenders to return to business soon after facing charges.

Merrell noted that prosecuting illegal gambling cases is particularly challenging because the current laws do not impose harsh enough penalties to deter these activities. In many cases, the individuals running the operations are not the ones being prosecuted, and instead, it is low-level employees, such as store clerks, who end up facing legal action. “How do we hold store employees accountable when the real beneficiaries are those behind the scenes profiting from these illegal activities?” Merrell questioned, emphasizing that the bill seeks to target those truly responsible.

Clarifying Legal and Illegal Gambling

The proposed bill also aims to clarify what constitutes illegal gambling in Alabama, specifically addressing electronic gambling machines like those used in historical horse racing. These machines are currently in use at racetracks across the state, operating under laws that permit pari-mutuel wagering. Hammett emphasized that his bill is not intended to target racetracks or any legal gambling operations, explaining, “Our focus is on illegal activities, not operations that are running legally at tracks.”

Despite Hammett’s push for tougher enforcement, he has expressed personal opposition to gambling in any form. Merrell also voiced his disapproval, citing the negative effects gambling can have on communities. “Both legal and illegal forms of gambling increase poverty, drive up crime rates, and hurt local economies,” he said.

Hammett has pre-filed the bill, HB41, for the upcoming legislative session beginning on February 5, 2025. The legislation is designed to provide law enforcement and prosecutors with stronger tools to combat illegal gambling activities in the state. Discussions are expected to continue as lawmakers weigh the implications of the proposed changes.