DoubleDown, IGT $415M Social Casino Settlement Approved
Posted on: June 5, 2023, 09:49h.
Last updated on: June 5, 2023, 11:03h.
In August 2022, DoubleDown Interactive (DDI) and International Game Technology (IGT) agreed to a $415 million settlement. The payment aimed to resolve a class action lawsuit brought against the social gaming developers. The settlement agreement received final approval last week in a Washington federal district court.
Attorneys representing plaintiffs Adrienne Benson and Mary Simonson in the litigation Benson et al v. DoubleDown Interactive, LLC, et al, argued that the DoubleDown Casino, a social gaming app and website, violated Washington’s state gambling laws. The lawsuit claimed that players like Benson and Simonson were wrongly lured into purchasing and losing online gaming chips by wagering at the DoubleDown Casino.
The DoubleDown Casino is a social gaming platform that doesn’t offer real money gambling. However, players can purchase interactive gaming chips and tokens. The financial exchange, the plaintiffs’ attorneys contended, violated Washington’s prohibition on commercial casinos.
“The Court hereby grants final approval to the Settlement and finds that the Settlement is, in all respects, fair, reasonable, and adequate, and in the best interests of the Settlement Class. The Court finds that the Settlement is within the authority of the Parties and the result of extensive, arm’s-length negotiations. The Parties are directed to proceed with the Settlement procedures specified under the terms of the Settlement Agreement, including payment and prospective relief,” wrote US District Judge Robert Lasnik in Washington’s Western District.
No Admission of Guilt
IGT is a UK-based manufacturer of casino slot machines, lottery products, and interactive games.
IGT acquired DoubleDown Interactive, a Seattle-based social casino firm, in early 2012 for $500 million. The company rose to prominence on Facebook, where players played slots for fun and not real money. IGT sold DDI in June 2017 to a South Korean firm called DoubleU Games for $825 million.
Benson v. DoubleDown was filed in June 2018 and argued that DoubleDown Casino, and its current and former owner, should be held financially culpable for operating unlawful games of chance in Washington state.
Consumers visiting DoubleDown Casino for the first time are awarded one million free chips. These free sample chips offer a taste of gambling and are designed to encourage players to get hooked and buy more chips for real money,” the lawsuit reasoned.
The DoubleDown Casino offers players who lose their chips the opportunity to purchase additional gameplay tokens. For example, the plaintiffs’ attorneys said players can buy 300K chips for $2.99.
“By operating the DoubleDown Casino, Defendants have violated Washington law and illegally profited from tens of thousands of consumers,” the lawsuit continued.
While DDI and IGT agreed to the $415 million class action settlement, the deal doesn’t include any admission of wrongdoing. All settlement class members who haven’t properly sought exclusion from the settlement also agree to be “permanently barred and enjoined from filing, commencing, prosecuting, intervening in, or participating (as class members or otherwise) in any lawsuit or other action” related to the settlement.
IGT Paying Bulk
The DoubleDown Casino settlement will see IGT pay the bulk of the funds. The agreement stipulates that IGT contributes $269.75 million, and DDI covers the remaining $145.25 million.
Lasnik agreed to heavily compensate the plaintiffs’ attorneys for bringing the lawsuit. Because the litigation was “risky, novel, and hard-fought,” the federal judge said nearly $121.5 million of the settlement fund should go to the plaintiff’s attorneys.
That leaves more than $292.5 million for the thousands of class action members.
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Is this settlement money taxable?