International Game Technology (IGT) and its former subsidiary DoubleDown Interactive have reached an agreement in principle to pay $415m to settle a class action complaint in Washington state.
The Benson v. DoubleDown Interactive LLC, et. al. lawsuit was filed in 2018, with plaintiffs who had lost money through the Washington-based group’s games, claiming its range of social casino products that use virtual chips constitute illegal gambling enterprises under state law.
The plaintiffs asserted claims under Washington’s Recovery of Money Lost at Gambling Act (RMLGA), Washington’s Consumer Protection Act (CPA), and theories of unjust enrichment.
IGT and DoubleDown, which it sold to DoubleU Diamond in June 2017, have now announced that they will settle this lawsuit. IGT will contribute $269.8m and DoubleDown $145.25m into a $415m settlement fund.
IGT said that under the terms of the settlement, all members of the class action who do not exclude themselves will release all claims relating to the subject matter of the lawsuit.
Subject to final court approval of the settlement of the Benson v. DoubleDown Interactive LLC, et. al. lawsuit, IGT and DoubleDown have also resolved all indemnification and other claims between themselves and their respective subsidiaries and affiliates relating to the case.
IGT said the settlement agreement would add a $119.8m non-operating expense in the third quarter related to the incremental loss associated with the Benson case and related claims between IGT and DoubleDown and their respective subsidiaries and affiliates. This is on top of the $150m accrued in the second quarter.
In its most recent trading update, DoubleDown said operating costs of $128.6m included $71.5m of expenses associated with the Benson class action complaint.
In filing the suit in 2018, original plaintiffs Adrienne Benson and Mary Simonson said they hoped to represent a class of “[a]ll persons in the United States who purchased and lost chips by wagering at the DoubleDown Casino” and to recover those losses on behalf of the class.
Both Benson and Simonson claimed they were not aware of the games’ terms of use as these were not easily accessible on the site. They also argued that while the virtual chips could not be redeemed for actual money, their value within the game amounts to gambling as defined by statute.
