Last year, casino workers in Missouri filed a class action lawsuit against Penn National Gaming and two of its casinos in the state, the Argosy Riverside Casino and Hollywood Casino St. Louis. In their lawsuit, the workers claimed that the trio breached multiple laws by illegally reducing their paychecks. Allegations filed by the casino workers claimed the companies reduced their paychecks to cover costs for maintaining, obtaining and renewing gaming licenses for Missouri.

Further allegations filed by the workers claimed the aforementioned companies created a tip pool applicable for table game dealers. Those tips were allegedly then used to cover paid time off for employees who were non-tipped such as supervisors and managers.

Judge Approves a $5.5 Million Settlement

According to the lawsuit, Penn National Gaming, Argosy Riverside Casino and Hollywood Casino breached the Fair Labor Standards Act. The casino workers alleged breaches of the Missouri Minimum Wage Law and the Employee Retirement Income Security Act.

Representing the plaintiffs are lawyers George A. Hanson, Alexander T. Ricke from Stueve Siegel Hanson LLP, as well as Ryan L. McClelland and Michael J. Rahmberg of McClelland Law Firm, P.C.

According to a report released by Missouri Lawyers Media, a judge recently approved a $5.5 million settlement, siding with the casino workers. US District Judge Stephen R. Bough, gave an initial approval last year in January. Now, as confirmed in the recent report, the judge gave final approval for the settlement of the lawsuit on May 25.

From the approved $5.5 million settlement, some 35% will be allocated toward attorneys’ fees. The Kaufman Fund along with Angels’ Arms, two charity organizations are going to benefit from unspent money.

Elsewhere in Missouri, twelve ballot initiatives will seek to pave the way for legal sports betting across the state. Supported by professional sports teams and legislators, the activity is yet to be legalized across Missouri. Each of the 12 proposals can appear on the Ballot in November, subject to collecting a minimum of 171,592 signatures by May this year.

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This settlement is the outcome of an internal review conducted by 888 subsidiary Virtual Global Digital Services earlier this year, which unveiled several deficiencies in their Know Your Customer (KYC) and Enhanced Due Diligence (EDD) practices. These shortcomings prompted the company to take corrective measures and cooperate with the regulatory authorities to address the issues.

The Operator Addressed Its Shortcomings

Virtual Global initiated its internal compliance investigation in January after 888 suspended VIP activities for select markets. The company expressed significant concerns regarding insufficient KYC and AML practices, prompting it to introduce updated policies and procedures regarding its risk assessment process. Although these efforts were successful, the Gibraltar regulator imposed a significant fine due to Virtual Global’s past failings.

According to the recent settlement, the 888 subsidiary must pay £2.9 million ($3.7 million). A portion of the settlement funds will benefit the Centre of Excellence for Responsible Gaming at the University of Gibraltar in its efforts to combat problem gambling in the region. The Gibraltar Gaming Commissioner decreed that the fine was suitable punishment and would take no further action against the offending operator. 

“888 has enhanced its policies and procedures in remediating the identified historical deficiencies. The Gambling Commissioner and Licensing Authority consider this matter closed.”

Gibraltar Gambling Commission

The Gibraltar regulator’s verdict aligns with its mission to ensure its licensees follow robust KYC and EDD practices. These measures are essential for verifying the identity of customers, preventing money laundering, and ensuring adherence to responsible gambling practices. Such fines should demonstrate the government’s ability to enforce regulations and hopefully contribute to the region’s removal from the FATF greylist.

888 Retains Its Significant Momentum

Virtual Global’s swift actions to remedy the identified shortcomings demonstrate the company’s commitment to ensuring compliance with regulatory requirements and maintaining the highest standards of responsible gambling and player protection. Despite 888’s past tensions with the Gibraltar regulator, the operator has been willing to collaborate with the authorities and rectify any issues.

The Virtual Global settlement marks the second high-profile fine 888 had to pay in recent months. Its $24 million penalty in the UK had significant repercussions, showcasing the need for more robust control over its subsidiaries. Despite these setbacks, 888 recorded impressive H1 growth, leveraging its substantial business synergies to excel in the highly competitive gambling market.

This substantial fine must remind all stakeholders in the online gambling sector about the importance of robust KYC and EDD procedures. By adhering to stringent compliance measures, companies can contribute to a safer and more transparent gambling environment for players and maintain the trust of regulatory authorities.

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Following years of litigation, a U.S. judge on Thursday approved a $415 million class-action settlement against DoubleDown Interactive LLC and International Game Technology PLC (IGT.N). The settlement resolves claims that the “social casino” and the online gaming company violated consumer protection provisions and Washington state gambling law where personal gambling online is a felony.

U.S. District Judge Robert Lasnik in Seattle federal court called the resolution “fair, reasonable, and adequate,” in his ruling that was the final approval order and ended almost half a decade of litigant action.

Conclusion of Nearly Half a Decade of Litigation

The case arose in 2018 about one year after Aristocrat Liesure’s Big Fish Games another social gaming site with chip purchases but also a black market trading space for the “chips of no value” was found to be offering illegal casino games in the state of Washington by the 9th Circuit Court of Appeals in Kater V. Churchill Downs – the panel was assembled to hear an appeal related to the Seattle courts’ finding that the games were not illegal under state.

In the most recent case, online consumers alleged the “social casino” games developed by the defendants “constitute unlawful gambling under Washington’s gambling laws.” The settlement was the latest in a series of related cases.

The specific arm of world gambling behemoth IGT, International Game Technology PLC, is based in the U.K., and DoubleDown have denied any liability. They argued that the plaintiffs’ claims “rest on novel and untested interpretations of Washington’s gambling laws.”

The games start out free to play with a certain number of free chips granted, but players must purchase additional chips or wait a period of time for additional chips to be awarded.

The suit was brought on behalf of tens of thousands of class members who “purchased and lost chips” by wagering at DoubleDown Casino, the plaintiffs’ lawyers alleged. Attorneys argued users were entitled to recover their losses under a Washington state law.

About half a dozen class members opted out of the settlement, but there were no formal objections to the deal and there was no clear indication that those former class members intended to pursue individual cases against the firms.

Lawyers have recovered over $600m for Plaintiffs

Edelson counsel, Todd Logan, speaking on behalf of the plaintiffs said on Friday that the firm’s social-casino litigation has produced or recovered over $650 million for clients and class members to date.

“Many class members stand to receive, individually, hundreds of thousands of dollars,” said Logan

Chicago-based Edelson was awarded over $120 million in the case.

Judge Lasnik’s fee award amounted to nearly 30% of the total award, outstripping the state’s and 9th U.S. Circuit Court of Appeal’s benchmark 25% top fee award for such cases.

Lasnik said the litigation was “risky, novel, and hard-fought,” in his award order, and so he approved a request for fees that went beyond a 25% benchmark.

The case is Benson et al v. DoubleDown Interactive LLC et al, U.S. District Court, Western District of Washington, No. 2:18-cv-00525-RSL.

Source: US court approves ‘social casino’ $415 million class settlement, Reuters, June 2, 2023

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