Friday, December 2, 2022

Zynga Is About to Settle an Illegal Gambling Products Case

Social mobile games developer Zynga Inc. is about to reach its fifth settlement with the plaintiffs in a series of litigations over illegal gambling in social casino mobile applications that have been going on for over seven years.

Zynga Is In For a $12M Settlement

A lawsuit was filed against Zynga as allegedly a few of the casino mobile games it is offering are actually asking players to pay for casino chips they are using virtually. This has been classified as illegal under Washington state’s laws on gambling as the games actually come into the category of games of chance and, therefore, are defined as gambling.

On June 27, the case was moved towards a resolution by the plaintiffs with their proposal for a settlement amounting to $12 million. The sum is about 25% of the reported damages by the plaintiffs, while the state law allows the amount to be from 20% to over 60%.

It has to be highlighted that this out-of-court settlement resolution is the result of seven-year-long litigation with a raft of four other cases against Zynga and it also involves practices from many years of other motions against the company. In the filing, it is explicitly stated: “Moreover, the excellent results delivered here equal those of the settlements reached in aggressively litigated cases.

This will be the fifth settlement for Zynga in a series of litigations that were filed against the company in the period from April to October 2015. The previous settlement amounts that the company has agreed to pay to comprise a total sum of $223 million.

The lawsuit against Zynga falls back on previous motions that have defined that under Washington state legislation virtual chips are indeed objects of value. As a result, mobile casino games are being put under the state’s gambling regulations.

Lawsuit Against Zynga in California

A similar litigation case against Zynga has been filed in the state of California where the company has allegedly violated a number of state laws. The same as in Washington, the filing is regarding Zynga’s social casino mobile games. The company has been accused of purposefully modeling its so-called video social games to be like casino-style gambling slot machines.  The games have their own currency that players can use to make spins on something very similar to a slot.

When players’ virtual currency runs out, they have to pay real money in order to continue playing. The plaintiff has, therefore, claimed that these games offered by Zynga as legal video games are in reality illegal gambling machines under California legislation and has expressed serious concern that the games are in fact enticing customers into playing something that could potentially lead to addiction.

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