Unregulated Gambling Allegations Rock Apple and Google in New Jersey

Allegations of Illegal Gambling

At the center of the lawsuit are sweepstakes casino apps that mimic traditional gambling games such as slots, blackjack, and roulette. These apps operate on a “freemium” model, allowing users to play for free but incentivizing the purchase of virtual currency to unlock additional features.

The lawsuit specifically names four sweepstakes casino operators — High 5 Casino, Wow Vegas, Crowncoins Casino, and McLuck.com — distributed through Apple’s App Store and Google’s Play Store. These platforms are accused of enticing users with “Game Coins” for gameplay and “Sweeps Coins,” which are purportedly redeemable for cash and prizes. However, the lawsuit alleges that payouts are “infrequently executed and predominantly withheld based on arbitrary and largely contrived reasons.”

Unlike previous lawsuits, this case explicitly names Apple and Google as defendants, citing their roles in facilitating financial transactions through their app marketplaces and payment systems, which reportedly take a significant share of the proceeds.

Critics argue that these apps turn smartphones into unregulated gambling devices. Unlike licensed casinos, sweepstakes operators are not subject to U.S. regulations or gaming taxes. This lack of oversight has allowed offshore companies like Australia-based Virtual Gaming Worlds (VGW) — creators of Chumba Casino, LuckyLand Slots, and Global Poker — to thrive. VGW reported $4 billion in revenue in 2023, including $322 million in net earnings, further underscoring the scale of the industry.

A Broader Legal Context

The New Jersey lawsuit is part of a growing trend of legal actions targeting Big Tech’s involvement in hosting gambling-related apps. Similar lawsuits have been filed in other jurisdictions, including Florida, where payment processors were named as co-defendants.

The Ninth Circuit Court of Appeals recently reopened a case against Apple, Google, and Meta, underscoring the increasing scrutiny these companies face. The central legal question in such cases revolves around the RICO Act, traditionally used to combat organized crime. Plaintiffs argue that by hosting and profiting from these apps, tech giants are complicit in enabling unregulated gambling.

The lawsuit also brings attention to the loopholes exploited by sweepstakes operators, who use clever marketing and offshore registration to avoid classification as gambling enterprises. For users, the risk lies in the perceived legitimacy of these apps due to their availability on trusted platforms like Apple’s App Store and Google Play.

Efforts to regulate sweepstakes casinos have also gained momentum. The National Council of Legislators from Gaming States has proposed the “Model Internet Gaming Act,” which aims to establish a legal framework for states to manage or ban these operations. The legislation seeks to impose hefty penalties on companies found violating state gaming laws.

Industry and User Impact

If the lawsuit succeeds, it could mark a turning point for how tech companies vet apps distributed through their platforms. Stricter regulations could force app stores to overhaul their policies, potentially banning or heavily scrutinizing apps involving virtual currencies, sweepstakes mechanics, or casino-style gameplay.

For users, this could mean increased protections but also limited access to certain types of apps. Critics have long argued that these platforms prey on unsuspecting consumers, leading to significant financial losses under the guise of harmless entertainment.

The outcome of the case could also set a precedent for other jurisdictions to follow, expanding the regulatory net over Big Tech and the burgeoning online gaming industry. While Apple and Google have not yet commented on the case, their role as gatekeepers of app distribution will likely face continued scrutiny in the years ahead.