Amazon settles $201 million dispute over social casino apps.

Amazon has reached a $201 million settlement with consumers as part of a legal proceeding filed on Thursday, pending a judge's approval. However, the company will not be covering this amount out of its own funds.

The settlement stems from a 2023 class-action lawsuit against Amazon, accusing the company of violating Washington's gambling and state protection laws by permitting transactions in social casino apps on the Amazon Appstore. In short, the plaintiffs claimed that Amazon enabled illegal gambling. This settlement lets US consumers seek up to $200 million in damages from third-party developers offering what they call illegal gambling in the marketplace. Essentially, Amazon won't pay the damages themselves. They agreed to the judgment but will shift the financial responsibility to the developers for any reimbursements consumers claim. Amazon has embraced the verdict and stated it will continue providing choices on its Appstore. However, developers must now improve the customer experience and ensure apps comply with relevant laws. The company has indicated it won't hesitate to remove non-compliant apps. Overall, Amazon denies any wrongdoing in the case. Meanwhile, the plaintiffs, who have pursued similar actions before, have already returned over $650 million to affected consumers.

The class is set to recover a substantial part of their total losses, keeping in line with the settlements reached against the social casino developers, the plaintiffs stated. It's uncertain if Amazon will face similar situations in other states, but the settlement, pending judicial approval, serves as a significant precedent for the company, shifting the responsibility onto developers to ensure their products comply with local gaming laws. Social casinos have been facing challenges across the United States, as lawmakers and regulators push back against the industry, contending that the sweepstakes currencies used by these apps are a way to circumvent gambling laws.