Lawsuits Target ‘Camouflaged’ Gambling Apps

CHICAGO (CN) - Consumers filed separate class actions against virtual casino Double Down and "Castle Clash" maker IGG, claiming that the companies' games are "camouflaged" gambling and illegal sweepstakes.

Margo Phillips filed a class action against Double Down Interactive, a Washington-based company that operates a virtual casino that offers users the chance to play slot machines, roulette, black jack and more online.

"Defendant has illegally profited from thousands of Illinois consumers," Phillips claims.

Double Down allegedly offers first-time visitors free "chips" to wager on its virtual games. When the free chips run out, the company sells visitors 150,000 chips for $2.99 or 100 million for $99.

Players cannot win cash money by playing Double Down's games - they win more chips instead. But these chips "are identical to the chips that defendant sells," according to the complaint.

Therefore, "Double Down Casino games are nothing more than camouflaged unlawful games of chance," Phillips says.

She claims she bought, wagered and lost over $1,000 worth of chips at Double Down Casino.

Jose Soto and others filed a similar complaint against Sky Union doing business as IGG.com, a Nevada-based company that runs the popular online game "Castle Clash."

While "Castle Clash" is free to play, the company sells "gems" that may be used by players in-game to improve their castle.

"While players can use the gems to improve their virtual towns and 'advance' in the game, these uses of gems merely obfuscate the unlawful games of chance IGG operates within Castle Clash," the complaint claims.

Plaintiffs say that "IGG routinely conducts sweepstakes to promote Castle Clash. Yet, IGG typically requires that consumers buy gems to enter the sweepstakes - in these cases, purchase is necessary for entry. Here, IGG directly ties the amount of gems that players purchase to the likelihood of winning the sweepstakes."

The monetary value of winning these prizes is further evidenced by the sale of gem-rich Castle Clash accounts on the secondary market for hundreds of dollars, according to the complaint.

Both complaints seek to recover the money plaintiffs spent on "chips" or "gems" as part of the operation of defendant's allegedly illegal lotteries, and damages for unjust enrichment.

Plaintiffs are represented by Rafey Balbanian with Edelson PC.

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