A U.S. District Judge has approved a $415 million settlement in the class-action lawsuit against social gaming operator DoubleDown Interactive LLC and its former parent company, International Game Technology PLC.
The class-action lawsuit, Benson v. DoubleDown Interactive LLC, et. Al., alleged that DoubleDown, billed as a “free-to-play” social casino, violated Washington gambling laws and consumer protection regulations because players were able to purchase “chips” to continue play after their initial free stake was gone, and subsequently lost those chips. DoubleDown and IGT’s attorneys argued that since there are no cash prizes available, the sites did not fall under the jurisdiction of the state’s gambling laws.
After the case dragged on for four years, the parties reached a settlement agreement last August. A total of $415 million will be paid into a settlement fund of which IGT’s subsidiaries will contribute $269.75 million and DDI will contribute $145.25 million.
All members of the nationwide settlement class who do not exclude themselves will release all claims relating to the subject matter of the lawsuit.
Judge Robert Lasnik ruled that the settlement was “fair, reasonable, and adequate.” Lasnik also awarded $121.5 million in legal fees.
As a result of the settlement agreement, IGT will accrue a $119.75 million 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 ($150 million was accrued in the second quarter).
IGT sold DoubleDown Interactive to South Korea-based DoubleU Diamond LLC, a subsidiary of DoubleDown, in 2017.
